Resource Stocks Lead Gainers in Tokyo

Chandrasekhar Atreya
03 Aug, 2010
New York City

Stocks in Japan gained on earnings outlook. Funai Electric Co first quarter net drops. Toyota appoints lead lawyer against class action lawsuit in the U.S. J-Power plans to replace two ageing coal-fired power plants in Hiroshima prefecture.

[R]5:00 PM Tokyo, Japan – Stocks in Japan gained on earnings outlook. Funai Electric Co first quarter net drops. Toyota appoints lead lawyer against class action lawsuit in the U.S. J-Power plans to replace two ageing coal-fired power plants in Hiroshima prefecture.[/R]

Improved risk appetite helped lift Tokyo stocks for the second day on Tuesday with investors taking cue from Wall Street and strong results in banking, commodity and auto sectors. Trading in Tokyo started on a brighter note on better economic news but lost ground during the day to close higher.

The Nikkei 225 Stock Average gained 1.29% or 123.70 to close at 9,694.01. The broader Topix gained 1% to close at 859.18 with about three stocks gaining for each that lost. A measure of the automakers was the second-biggest contributor to the Topix’s gain among the index’s 33 groups.

Of the stocks in the index 195 gained and 24 lost while 6 remained unchanged.

Electric Power Development known as J-Power will replace two ageing coal-fired power plants in Hiroshima Prefecture with a single state-of-the-art coal plant at a cost of slightly more than 100 billion yen.

Asahi Breweries is considering an alliance with Lotte Group of South Korea and may sell its stake in the same country’s Haitai Beverage Co, said Takayuki Tanaka an Asahi spokesman.

Funai Electric Co, the Japanese maker of audio-visual equipment reported a drop of 86% in first quarter net income to 433 million yen.

Shionogi & Co, the Japanese drug maker said yesterday that net income for the year ending March 2011 will probably reach 36 billion yen down 3 billion yen from its earlier forecast of 39 billion yen. The company said it expects sales to be 4.1% less than its previous projection, at 290 billion yen.

Toyota Motor Corp appointed a law firm to lead the case in a consolidated lawsuit filed by car owners in which the company has been accused of failing to disclose defects relating to sudden acceleration.

Bernstein Litowitz Berger & Grossmann LLP, will serve as lead counsel in the case after yesterday’s decision by U.S. District Judge Dale Fischer in Los Angeles.

Japan will not expand an income support program to farmers of dairy, livestock and vegetables because of budget constraints, Nikkei English News reported. It also said that the Agriculture Ministry will request only about 800 billion yen as funds for the support program in fiscal 2011, much less than the 1.4 trillion yen the ruling Democratic Party of Japan had said it would spend.

Stock Movers

Trading companies advanced after the commodities and crude oil prices gained in regional trading. Mitsubishi Corp gained 4.7% to 1,973 yen, Mitsui & Co gained 4.4% to 1,158 yen and Itochu Corp advanced 5.6% to 721 yen.

Increase in copper and base metal prices lifted mining and refiners stocks. Sumitomo Metal Mining Co, Japan’s second-largest copper smelter and top nickel producer, added 3.5% to 1,187 yen and Mitsui Mining & Smelting Co climbed 2.6% to 240 yen.

Nisshin Steel Co, the largest gainer of all stocks in Nikkei index with an increase of 6.3% to close at 152 yen.

Mazda climbed 1.9% to 210 yen, Toyota Motor Corp gained 1.1% to close at 3,140 yen and Nissan Motor Co gained 2.1% to 677 yen.

Olympus Corp, an endoscope maker that gets more than 20% revenue from North America also gained 1.2% to 2,365 yen.

Shionogi & Co fell 3.06% to 1,618 yen after the stock was downgraded to “neutral” from “outperform” by Credit Suisse Group AG.

Ricoh & Co was the biggest loser at 3.16% to 1,194 yen.