Nikkei in Japan Near 10-month High; Honda, inpex, Canon Lead Gainers

Nigel Thomas
17 Feb, 2011
New York City

Stocks in Japan inched higher as foreign investors continue to increase their net exposure. More than 1,000 companies in the first section of Tokyo Stock Exchange are expected to increase earnings by 40% in the current fiscal year. Improved global sentiment lifted Nikkei index.

[R]5:10 PM Tokyo – Stocks in Japan inched higher as foreign investors continue to increase their net exposure. More than 1,000 companies in the first section of Tokyo Stock Exchange are expected to increase earnings by 40% in the current fiscal year. Improved global sentiment lifted Nikkei index.[/R]

Stocks in Tokyo trading closed higher for the fifth session in a row as investors focus on global growth story. Investors ignored the sovereign debt worries in the European peripheral nations, sharp fall in Chinese economic growth and the U.S. recession.

More than 1,000 companies listed in the first section of Tokyo Stock Exchange are expected to report an increase in earnings of at least 40% from the previous year, according to the data complied by 123jump.com research team.

Toyota, Casio, Nikon, Olympus, Hitachi and Honda Motor are few of the companies that are benefiting from the recovery in global demand.

Foreign investors are increasing their exposure to stocks in Japan. In January, foreign investors added net purchase of 708.8 billion yen.

Nikkei 225 Stock Average increased 0.3% to 10,836.60 and the broader Topix increased 0.7% to 974.14. Export sensitive stocks closed higher.

U.S. home starts in January surged 15% from December and the Fed revised economic outlook for the year. The Fed estimated economic growth between 3.4% and 3.9% compared to previous range of 3% to 3.6%.

Stock Movers

Astella Pharma rose 1.5% to 3,310 yen after it agreed to pay $1.3 billion to Aveo Pharmaceuticals Inc to sell its experimental cancer drug in Asia.

Honda Motor increased 1.1% to 3,694 after the company confirmed its plan to buy back as much as 40 billion yen of its stock.

Canon led the gainers in the Nikkei index with a rise of 3.9% to 4,105 and Sony Corp added 1.8% to 3,034.

Sustained rise in Crude oil prices lifted stocks of two petroleum companies. Brent Crude rose to a 2-year higher as the Middle East unrest spreads to oil producing nation Libya and Bahrain and Yemen struggle with sporadic violence.

Japan Petroleum Exploration Co. increased 2.7% to 3,870 yen and Inpex added 2.9% to 578,000.

Ibiden Co. increased 2.3% to 2,790 yen after it plans to open a factory in Malaysia to make smart phone components using ceramic technology.

Shipping companies increased after freight rate measure the Baltic Dry Index rose for the eighth day in a row.

Mitsui O.S.K. Lines Ltd increased 1.4% to 581 yen and Nippon Yusen K.K. gained 1.3% to 382 yen and Kawasaki Kisen Kaisha Ltd added 2.4% to 376 yen.

Banks and insurance companies gained. Nomura Holdings Inc increased 1.1% to 551 yen and Tokio Marine Holdings Inc soared 4.1% to 2,850 yen and Sumitomo Mitsui Financial Group Inc added 1% to 3,169 yen.

Resona Holdings added 2.4% to 456 yen after Asahi newspaper reported that the troubled lender will repay 850 billion yen as a repayment of public funds to the Japanese government.