Nikkei Rallies 2.7%; Komatsu Gains

Mayank Mehta, Chandrasekhar Atreya and Sanjay Barot
14 Jul, 2010
New York City

Stocks in Japan gained on Intel

[R]5:00 PM Tokyo, Japan – Stocks in Japan gained on Intel’s results and earnings outlook in the nation. Sapporo Holdings is planning to buy a recognized beer brand in North America. Sumitomo Metal says nickel deficit will widen in the year. Komatsu, the maker of earth movers, gains after raising its full year profit.][/R]

Japanese stocks advanced after Intel reported better-than-expected net income. The positive outlook for earnings led by Komatsu, the world’s second-largest maker of earth movers also added to investor sentiment.

The Nikkei 225 Stock Average advanced 2.71% or 258.01 to close at 9,795.24 in Tokyo today. The broader Topix Index also gained 1.9% to close at 870.73 with all 33 industry groups covered by the index climbing.

Sapporo Holdings Ltd, 18% owned by U.S. hedge fund Steel Partners, is in talks with two or three companies in the U.S. to buy a beer brand to boost overseas sales after domestic demand has started falling.

“We want a brand with recognition. We want another brand in North America besides our own Sapporo and Canada’s Sleeman Breweries Ltd,” said Yoshiyuki Mochida, Managing Director for Sapporo’s international operations, yesterday.

The brewer has set aside 65 billion yen to fund its growth strategy in two years ending December 2011, via acquisitions and partnerships to spur profits as a shrinking population saps demand at home.

Komatsu Ltd gained as much as 6% in early trading in Tokyo after the company raised its full year profit forecast to reflect surging demand. Komatsu shares were the biggest gainers in the Nikkei 225 Stock Average. The shares touched 1,799 yen on the Tokyo Stock Exchange in the morning session.

The nickel market after a surplus of 27,000 tons last year may swing into a greater deficit than expected this year because of disruptions in supply and surging Chinese demand, said Sumitomo Metal Mining Co.

World demand may exceed supply of 40,000 tons this year, up from the forecast of 36,000 tons made by the company in April, said Toru Higo, General Manager of the company’s nickel sales department, in an interview yesterday in Tokyo.