Nikkei surges 3.4% after Fed slashes rates

Nikkei surges 3.4% after Fed slashes rates
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First Published: Wed, Sep 19 2007. 06 29 PM IST
Updated: Wed, Sep 19 2007. 06 29 PM IST
Tokyo, 19 September Japan’s Nikkei average surged 3.4% to a two-week high today, led by high-tech firms such as TDK Corp and Kyocera Corp as investors were encouraged by the Federal Reserve’s bigger-than-expected rate cut.
Financial shares including Sumitomo Mitsui Financial Group Inc made a strong rebound, tracking a rally in their Wall Street peers.
“The day’s session may become an occasion for retail investors to return to the market,” said Kenichi Hirano, operating officer at Tachibana Securities.
He said Japanese stocks are likely enjoy a fresh round of buying after first-half earnings reports that begin in late October, when many firms are expected to revise up full-year outlooks.
But he said that in the near term, the Tokyo market is likely to track ups and downs in Wall Street.
“I cannot be optimistic with today’s rise alone, Wall Street may fall again if earnings by Morgan Stanley later in the day are disappointing,” he said.
The benchmark Nikkei ended the morning session up 531.49 points at 16,333.29. The broader TOPIX index climbed 3.52% to 1,564.08.
TDK rose 4.9% to 10,160 yen and Kyocera climbed 3.8% to 10,900 yen.
Trade remained light, with 803 million shares changing hands against an average 882 million shares a day last week. Advancing shares beat decliners by 1,598 to 87.
Cosmo up
Cosmo Oil Co jumped 5.7% to 575 yen after news that an investment arm of the Abu Dhabi government will spend about $776 million to buy one-fifth of Cosmo Oil, becoming the top shareholder in Japan’s fourth-largest oil company.
Sumitomo Mitsui Financial Group was up 6.3% at 825,000 yen and Mitsubishi UFJ Financial Group gained 6.1% to 1.05 million yen. Mizuho Financial Group rose 5.8% at 640,000 yen.
Mitsubishi Heavy Industries Ltd climbed 5.2 % to 668 yen after the Nikkei business daily said today. Japan’s biggest machinery maker will enter the market for power plant facilities in Russia through an alliance with Russian-held investment group Renova.
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First Published: Wed, Sep 19 2007. 06 29 PM IST