Nikkei in Tokyo Soars 2%; Insurers Face $2 Billion Thai Flood Losses

Nigel Thomas
27 Oct, 2011
New York City

The benchmark index in Japan gained 2% on the European leaders

[R]6:00 PM Tokyo – The benchmark index in Japan soared 2% on the European leaders’ agreement on debt restructuring and bank recapitalization plan. Thai floods prompt more companies to cut production estimate and property insurers face more losses. Namco Bandai and Osaka Titanium Technologies surged on positive outlook.[/R]

Stocks in Japan soared after European leaders said they agreed on Greek bond restructuring and bank recapitalization plan. The final agreement reached after ten hours of negotiations lifted sentiment in markets across Asia.

The Nikkei 225 Stock Average rose 178.07 or 2% to 8,926.54 and the broader Topix index added 2.2% to 762.79.

The yen retreated to 75.71 from a record of 75.90 against one dollar.

In trading on the First Section of the Tokyo Stock Exchange, 1.81 billion shares changed hands, up from 1.5 billion shares trading on Wednesday.

Floods in Bangkok are expected to swell in the next three days as rain pours, water levels rise and high tide slow down the water flow in the city’s river Chao Phraya. Governor Sukhumbhand Paribatra urged residents to “evacuate” and said “this is the first time I am asking you to leave.”

Two days ago, Thai Prime Minister Yingluck Shinawatra declared five-day holiday in Bangkok so that residents can cope with the flood waters and Education Ministry closed schools until November 7.

Prime Minster Shinawatra said it may take as long as one month for water to recede if one of the dykes protecting Bangkok breaks.

Insurance regulator in Thailand estimated 140 billion baht of losses to manufacturers and Japanese property and casualty insurers are expected to take a hit on the underwritten losses at seven flooded industrial estates.

Manufacturers have 457 billion baht of insurance coverage in the seven estates according to the regulator.

Stock Movers

Toyota Motor increased 56 yen to 2,584 yen and Honda Motor Co. added 64 yen to 2,393 yen and Nissan Motor Co Ltd added 29 yen to 719 yen.

Sony Corp increased 85 yen to 1,650 yen, Panasonic Corp gained 24 yen to 806 yen and Canon Inc increased 35 yen to 3,545 yen.

Olympus Corp surged 24% or 256 yen to 1,355 yen. Fanuc Ltd increased 570 yen or 4.6% to 13,080 yen. Kyocera closed up 110 yen at 7,200 yen.

Olympus Corp said Chairman Tsuyoshi Kikuawa resigned yesterday and the company said its advisory fees of $687 million are “not unreasonably high.”

The Tokyo Electric Power Company decreased 14 yen to 306 yen, Tohoku Electric Power decreased 6 yen to 935 yen and the Kansai Electric Power fell 3 yen to 1,189 yen.

Mitsui OSK Lines, Ltd increased 19 yen to 318 yen, Kawasaki Kisen Kaisha, Ltd closed up 10 yen to 159 yen and Nippon Yusen K.K. gained 10 yen to 204 yen.

Dai-ichi Life rose 6.4% to 90,900 yen as European leaders agreed to bank recapitalization plan and Greek debt restructuring.

Property and Casualty insurers declined on the mounting losses related to Thailand floods.

MS & AD Insurance Group Holdings, Inc rose 4.5% or 69 yen to 1,576 yen and NKSJ Holdings Inc gained 58 yen to 1,617 yen.

Mitsubishi UFJ Financial Group rose 19 yen to 350 yen and Sumitomo Mitsui Financial Group increased 108 yen to 2,234 yen.

Mitsubishi Corp increased 111 yen to 1,637 yen and Mitsui & Co, Ltd gained 58 yen to 1,165 yen. Marubeni Corp increased 31 yen or 7% to 464 yen.

Nippon Electric Glass Co. Ltd dropped 7.1% to 758 yen after the glass maker said first quarter net declined 42% to 24.9 billion yen on weaker than expected sales of flat panel displays.

Komatsu Ltd increased 73 yen to 1,916 yen and Hitachi Construction Machinery Co increased 96 yen to 1,522 yen.

Namco Bandai Holdings Inc soared 9.1% to 1,150 yen after the toy maker lifted its full-year net estimate 77% to 15 billion yen on stronger sales.

Osaka Titanium Technologies Co surged 8% or 320 yen to 4,245 yen after the smelting company lifted its full-year operating net by 11% to 7.8 billion yen on higher sponge titanium prices.

Toho Titanium Co. jumped 8% to 1,639 yen after it narrowed its current year net loss estimate to 300 million yen from the previous outlook of 500 million yen.

Shimano Inc declined 2.4% to 3,845 yen after bicycle maker reported net income for nine months to September declined 21% to 11.4 billion yen.