Nikkei in Tokyo Rebounds to Close Up 1%, Advantest Plunges 4%

Hiruki Nakamura
26 Sep, 2013
New York City

Market indexes in Tokyo staged a turn around after falling as much as 1% in a volatile and listless trading. Shipping companies surged more than 3% and banks advanced more than 1%. Lixil Group soared 4% on a deal to buy Germany based Grohe. Advantest plunged on the third annual loss forecast.

[R]4:25 PM Tokyo – Market indexes in Tokyo staged a turn around after falling as much as 1% in a volatile and listless trading. Shipping companies surged more than 3% and banks advanced more than 1%. Lixil Group soared 4% on a deal to buy Germany based Grohe. Advantest plunged on the third annual loss forecast.[/R]

In a choppy and direction less trading market indexes jumped up and down more than 1% but at close the Nikkei index gained 1.2%.

The growing uncertainty in the U.S. debt ceiling negotiations and a possible government shutdown next week kept several investors guessing and cautious.

Market sentiment turned around in the afternoon after Kyodo News Service said Abe government is likely to consider a cut in corporate tax as a part of economic stimulus announcement as early as next week. The news service did not cite any source.

However, traders latched on the possibility of corporate tax cut and drove market indexes higher from the 1% decline in the day.

Lixil to Buy Grohe for $4 Billion

Lixil Group Corp and Development Bank of Japan agreed to acquire sanitary fixtures maker Grohe Group for 3.06 billion euros or $4.1 billion.

Dusseldorf, Germany based bathroom-fixtures maker has been on sale since last six months.

The deal with Lixil is a big win for TPG and a unit of Credit Suisse Group AG after the two acquired Grohe in 2004 for a reported $1.8 billion from BC Partners Ltd and facilitated the company’s growth in Asia.

Lixil Group agreed to acquire 87.5% of Grohe and agreed to pay in cash funded by an increase in debt and a bond offering that may be completed in the next few months.

The deal is expected to be completed in the first quarter of 2014.

Stocks in Review

Lixil Group, the bathroom fixtures maker, soared 4% after it agreed to acquire Europe’s largest sanitary fixture maker Grohe for $4 billion.

Advantest fell 4% at close but recovered from an earlier loss of 10% after the chip equipment maker said it is likely to report a loss in the current financial year, third annual loss in a row.

Financials stocks closed lower tracking the weakness in U.S. indexes. Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group declined more than 1% in the session but at close gained.

Sumitomo Mitsui added 1.3% to close at 4,945 and Mitsubishi UFJ Financial Group advanced 1.2% to 653 yen.

Nippon Yusen KK soared 3.4% to 331 yen and Kawasaki Kisen and Mitsui O.S.K. gained 3.4% and 3.8% respectively.