Singapore/Tokyo: Mitsubishi UFJ Group Inc. led Japanese banks higher as concern eased that earnings will disappoint investors.
A measure of lenders posted the biggest gain on Japan’s Topix index after Mitsubishi UFJ Nicos, a credit card company 65% owned by the bank unit of Mitsubishi UFJ, said it will return to profit this business year.
“Bank shares rose as investors shifted their money into domestic demand-related stocks after they became less worried about earnings,’’ said Hiroshi Chano, who helps look after $7.3 billion (Rs29,732 crore) at Yasuda Asset Management Co. in Tokyo.
BHP Billiton Ltd, the world’s largest mining company, declined after copper prices halted a six-day rally in New York. Steelmakers gained after UBS AG advised investors to buy shares of Japan’s Hitachi Metals Ltd.
The Morgan Stanley Capital International Asia-Pacific Index climbed less than 0.1% to 149.51 at 11:22 am in Tokyo. The measure yesterday jumped 1.5% to a record.
Japan’s Topix index rose 0.1%, while the Nikkei 225 Stock Average lost 0.1%. Benchmarks advanced in the Philippines and New Zealand, and fell elsewhere.
U.S. stocks rose for a fifth day, marking the market’s best initial performance in May in 17 years. The Standard & Poor’s 500 Index climbed 0.3% to within 1.2% of its 2000 peak, helped by Alcoa Inc.’s $26.9 billion bid for Alcan Inc., and BAE Systems Plc’s agreement to buy Armor Holdings Inc.
Mitsubishi UFJ, Japan’s largest lender, gained 2.3% to 1.32 million yen. Mitsubishi UFJ Nicos, a consumer credit card company, said it expects net income of 15.5 billion yen this business year, compared with a 52.2 billion yen loss in the year ended 31 March. The stock jumped 12% to 371 yen.
Other credit card companies also gained. Credit Saison Co. rose 4.1% to 3,790 yen, while OMC Card Inc. added 2.5% to 914 yen.
Mizuho Financial Group Inc., Japan’s second-largest bank by assets, jumped 2.9% to 772,000 yen. Sumitomo Mitsui Financial Group Inc., the third biggest, rose 2.8% to 1.09 million yen.
“Investors who were worried about negative surprises from corporate earnings have now turned more optimistic about the outlook,’’ said Seiichi Suzuki, a strategist at Tokai Tokyo Securities Co. in Tokyo.
Stopping the Rally
BHP slid 1.5% to A$31.10, ending a four-day, 8.3% advance. Rio Tinto Group, the world’s third-biggest mining company, fell 0.9% to A$90.59. The stock jumped 13% in the previous four days.
Copper fell 1.1% in New York. The metal, used in pipes and wires, has surged 34% in the past two months, and last week reached an 11-month high.
“The copper price came off a touch overnight, enough to stop a fairly sizeable rally in BHP and Rio the past four days,’’ said Hans Kunnen, who helps manage the equivalent of $111 billion at Colonial First State Investment Management Australia Ltd in Sydney.
Shares of Hitachi Metals, the steel and electrical products unit of Hitachi Ltd, surged 10% to 1,468 yen, the highest since August 1990.
Atsushi Yamaguchi, a Tokyo-based analyst at UBS, raised his rating on Hitachi Metals to “buy’’ from “neutral.’’ That’s the top level in UBS’s three-tiered rating system and indicates that the stock’s return during the next 12 months may exceed that of the overall market by more than 6%.
Nippon Steel Corp., Asia’s biggest steelmaker, rose 2.1% to 870 yen. Sumitomo Metal Industries Ltd, Japan’s third-largest steelmaker, climbed 1.1% to 640 yen.
Signs of strong profit growth elsewhere in the region also boosted share prices. Hyundai Heavy Industries Co., the world’s biggest shipbuilder, surged 5.8% to a record 276,000 won.
Net income for the three months to 31 March jumped to 371 billion won ($402 million) from 22.9 billion won a year earlier, the Ulsan, South Korea-based company said yesterday. That median estimate in a Bloomberg News survey of four analysts was for profit of 283 billion won.