China Rate Cut Fuels Another Advance in Nikkei; Hitachi Soars

Hiruki Nakamura
26 Oct, 2015
New York City

Nikkei average in Tokyo closed at a 2-month high after China lowered its rate in a surprise move and ECB offered to do more to support lending. The moves by two central banks stoked speculation of additional stimulus steps from the Bank of Japan. Hitachi and Panasonic surged on stronger earnings.

[R]4:30 PM Tokyo – Nikkei average in Tokyo closed at a 2-month high after China lowered its rate in a surprise move and ECB offered to do more to support lending. The moves by two central banks stoked speculation of additional stimulus steps from the Bank of Japan. Hitachi and Panasonic surged on stronger earnings expectations. Shipping companies lost ground ahead of earnings on loss worries.[/R]

Nikkei average in Tokyo closed at a 2-month high after China conducted a surprise rate cut stoking speculation that the Bank of Japan may follow with additional stimulus.

The Nikkei 225 Stock Average jumped 121.82 or 0.6% to 18,947.12 and the broader Topix index rose 11.15 to 1,558.99.

The yen strengthened to 120.94 against a dollar.

Stocks in Review

Hitachi, Ltd surged 6.1% to 730.50 yen after the diversified company lifted revenues forecast for the first-half ending in September to jump 2.3% to 4.81 trillion yen from the earlier estimate of 4.70 trillion yen.

Net income for the period is forecasted to soar 38.6% to 97 billion yen from the previous guidance of 70 billion yen.

Hitachi Maxell Ltd increased 1.9% to 2,088 yen after the audiotapes and videotapes and compact discs maker said reported net sales in the nine-month ending in September rose 4% from a year ago to 78.57 billion yen.

Net income in the period soared 62.7% to 2.86 billion yen compared to 1.76 billion yen and earnings per share gained to 54.14 yen from 33.27 yen.

The company forecasted net sales for the year to edge up 0.6% to 157 billion yen and net income to decline 29.6% to 4.80 billion yen.

M3 Inc soared 4.1% to 2,425 yen after the online medical services provider reported net sales in the nine-month ending in September jumped 23.9% from a year ago to 30.53 billion yen.

Net income in the period surged 28.5% to 6.15 billion yen compared to 4.79 billion yen and diluted earnings per share increased to 17.16 yen from 13.62 yen.

The company forecasted net sales for the year to soar 22.7% to 63 billion yen and net income to advance 15.8% to 11.30 billion yen.

Mitsubishi Estate Co Ltd slipped 1.6% to 2,596.50 yen after the Nikkei news reported real estate developer’s revenues for the first-half ending in September to jump 2% to 3% or 450 billion yen and operating income to soar 10% to 75 billion yen.

For the year, the company estimated operating profit to decline 14% to 135 billion yen.

Toshiba Corporation jumped 3.5% to 356.10 yen after the Nikkei daily said the electronic products maker greed to sell its production line for CMOS image sensors at a plant in Oita Prefecture to Sony Corporation for about 20 billion yen or $164.68 million.

Sumitomo Corporation rose 0.1% to 1,338 yen after the trading company secured contract worth about $300 million for a 400-megawatt gas-fired power plant in Turkmenistan.

The deal was announced by Prime Minister Shinzo Abe during his visit to the country.