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Japan’s Nikkei at 6-week closing high

Japan’s Nikkei at 6-week closing high
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First Published: Thu, Sep 27 2007. 12 21 PM IST
Updated: Thu, Sep 27 2007. 12 21 PM IST
Agencies
Closing
Tokyo: The Nikkei average rose 2.4% to end at a 6-week closing high on Thursday, 27 September, as investors, encouraged by gains on Wall Street, bought recent poor performers while Hitachi Ltd surged on a possible unit sale.
Amid easing concern about fallout from subprime problems, bank and brokerage firms rang up hefty gains while shares in consumer finance firms, the worst performing sector this year, lured buyers looking for bargains.
Mitsui Fudosan Co Ltd and other property stocks gained ground after Deutsche Securities’ upgrade.
“Investors may have finally started to focus on laggards as the U.S. market is holding firm,” said Toshihiko Matsuno, assistant general manager of the investment research department at SMBC Friend Securities.
“Investors are buying stocks on expectations that new money will flow into the market as the latter half of the fiscal year starts next week,” he added.
The Nikkei share average gained 396.48 points to 16,832.22, the highest close since 14 August. The Topix was up 2.5% at 1,615.15.
Small-cap markets were also firm with the Mothers index rising 5.5 percent to 720.50, extending its 8 percent jump on Wednesday.
It is also in investors’ interest to keep the market level higher as Friday’s closing prices will determine the book value of their portfolios, said Tomomi Yamashita, fund manager at Shinkin Asset Management Co Ltd.
“You would buy stocks if tomorrow’s prices would affect the amount of your pay check,” he said.
Trade picked up, with 2.1 billion shares changing hands on the Tokyo exchange’s first section, the highest volume since Sept. 14. Advancing stocks beat declining ones by a ratio of nearly nine to one.
First update
Tokyo: Japanese stocks advanced around 2% on Thursday as investors, encouraged by gains on Wall Street, bought recent poor performers such as financials, while Hitachi Ltd jumped on a possible unit sale.
Mitsui Fudosan Co Ltd and other property stocks gained ground after Deutsche Securities upgraded the sector while shares in consumer finance firms, the worst performing sector this year, lured buyers looking for bargains.
“Investors may have finally started to focus on laggards as the U.S. market is holding firm,” said Toshihiko Matsuno, assistant general manager of the investment research department at SMBC Friend Securities.
“Investors are buying stocks on expectations that new money will flow into the market as the latter half of the fiscal year starts next week,” he added.
The Topix was up 2.16% at 1,610.07 as of 0505 GMT, while the Nikkei share average gained 1.91%, or 313.82 points, to 16,749.56.
Small-cap markets were firm with the Mothers index rising 5.1% to 717.38, extending its 8% jump on Wednesday.
The strong performance in the Mothers market may show that the market may have bottomed out and hedge funds may be coming back to the Japanese market, said Takahiko Murai, general manager of equities at Nozomi Securities.
Shares of Hitachi shot up 7.7% to 755 yen after sources told Reuters it may sell a stake in its struggling hard disk drive unit.
Japan’s top three property firms jumped to a seven-week high after Deutsche lifted its ratings on them to “buy” from “hold” and raised price targets, citing strong industry environment.
Morning
Tokyo: Japanese share prices climbed 1.54% in morning trade on Thursday, 27 September, buoyed by overnight gains on Wall Street and a softer yen which boosted exporters.
They said investors were also hoping for some upbeat earnings news from Japanese companies in the coming weeks.
The Tokyo Stock Exchange’s benchmark Nikkei-225 index of leading shares rose 252.90 points to 16,688.64 by the lunch break.
The broader Topix index of all first-section shares gained 26.15 points or 1.66% to 1,602.17.
Gainers outnumbered decliners 1,307 to 294, with 104 issues unchanged.
Turnover rose to 952 million shares from 877 million Wednesday morning.
“The subprime mortgage trouble appears to have eased and the Fed’s rate cut last week along with expectations of another rate cut next month have kept financial markets stable,” said Kazuhiro Takahashi, equity general manager at Daiwa Securities SMBC.
“But the overall picture is not yet clear and there is a possibility of the market falling again when negative news surfaces,” he said.
There was also some window-dressing as the end of the fiscal first half approaches, he said.
Takahashi said there was a risk of a sell-off if economic indicators in the US turn out stronger than expected because this would reduce the chances of another rate cut by the Fed in October.
Shares were higher across the board. Gainers were led by properties, banks and exporters, particularly technology and auto stocks.
Among property shares, Mitsubishi Estate rose 230 yen or 7.4% to 3,330 yen, Mitsui Fudosan climbed 180 yen or 6% to 3,160 yen and Sumitomo Realty & Development was up 240 yen or 6.3% at 4,030 yen.
In the financial sector, Sumitomo Mitsui Financial rose 41,000 yen or 4.9% to 874,000 and Resona Holdings jumped 10,000 yen or 5.6% to 189,000.
Among auto shares, Nissan Motor rose 24 yen or 2.1% to 1,144, Toyota Motor was up 90 yen or 1.4% at 6,700 and Honda Motor rose 70 yen or 1.9% to 3,850.
Matsushita Electric Industrial was up 30 yen or 1.4% at 2,140 yen and Sony rose 130 yen or 2.4% to 5,560.
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First Published: Thu, Sep 27 2007. 12 21 PM IST
More Topics: Stocks | Japan | Nikkei | Topix | yen |