Tokyo: Japanese stocks rose on Monday, 29 October, driven up by Nissan Motor Co, which posted surprisingly strong results, and bank shares that jumped as investors bet the worst is over for the sector after a credit squeeze over the summer months.
Expectations that further interest rate cuts from the US Federal Reserve will help loosen up credit markets also supported bank shares and the broader market.
A string of blue-chip stocks such as Canon Inc and Honda Motor Co Ltd helped buoy the market on profitability hopes, sending Tokyo stocks to their highest levels in more than a week.
But investors sold shares in firms with disappointing results, such as Advantest Corp, the world’s largest maker of microchip testers, which skidded nearly 7 percent after it posted a drop in first-half net profit and cut its guidance for this year to below expectations.
“Blue-chip stocks are the pillar of today’s market. It’s also straightforward: Investors are picking up shares with good earnings,” said Akihito Yamanoi, a general manager of the equity investment department at AIG Global Investment Corp. (Japan).
The benchmark Nikkei average was up 1.2% or 192.45 points to end the day at 16,698.08, the highest close since 19 October.
The broader Topix index climbed 2.1% or 32.52 points to 1,606.49, its highest finish since Oct. 18.
The Nikkei average has recovered nearly 10% since the year’s low hit in August amid global credit fears, but it fell 1.8% last week as a stronger yen and fresh concern about US economic health dampened investor appetite.