Banks Recover in Tokyo

123jump.com Staff
23 Oct, 2007
New York City

Stocks in Tokyo edged higher on a rebound in the banking sector. Nikkei 225 index closed up 0.07% to 16,450.58 and broader Topix Inde gained 0.5% to 1,570.55. October private consumption was reported flat by the Cabinet Office of Japan. Fuji Heavy Industries gained after it revised its sales and earnings forecast for the year. Asian markets surged led by 5% rise in India. Hong Kong, Indonesia, and Korea surged above 3%.

[R]6:00AM New York, 7:00PM Tokyo – Tokyo stocks inched higher as banking stocks recovered.[/R]

In Tokyo trading Nikkei 225 recovered from a slump in the morning session to close up 0.07% or 21.11 to 16,450.58, while the broad Topix Index gained 0.5% to 1,570.55.

In the first section of Tokyo Stock Exchange 6.9 billion shares worth 935 billion yen were traded compared to 8.9 billion shares worth 1.1 trillion yen traded in the morning session yesterday, and in the second section 223 million worth 5.1 million yen were traded.

Of the Nikkei 225 stocks 133 rose, 77 fell and 15 were unchanged. Nippon Soda Company led advancing stocks, rising 5.09% followed by Credit Saison climbing 4.41%. Financial and technology stocks gained as well.

Of the index shares, Nippon Soda Co paced gainers with a rise of 5.09%, followed by gains in Credit Saison of 4.41%, in Fuji Heavy Industry of 3.53%, in Shinsei Bank Limited of 3.50% and in Nippon Paper Group of 3.45.

Yahoo Japan Corporation led the declining index shares, shedding 4.69%, followed by losses of 4.21% in Kyowa Hakko Kogyo Company, 3.12% in Nippon Mining House, 2.90% in Mitsui Electric Company and 2.50% in Softbank Corporation.

Cabinet Office said yesterday in its monthly economic report that October private consumption is almost flat compared to the previous assessment that it may have been rising. adding that corporate profits were improving and business investment was increasing though week movements have began to be seen recently.

According to the report, the employment situation is improving even though some “severe aspects remain”. It also observed that domestic private demand and high corporate profits that were feeding into the household sector would support economic recovery in the short-term.

However, the October report said attention should be given to the effects of the U.S. housing slump and increasing oil prices to the Japanese economy.

Japan Research Institute estimated that the decline in housing investment will drive GDP down by an annualized 0.8% in the third quarter.

The yen continued to soar against the dollar, rising to 114.37 from 114.39 and also firmed to 162.49 from 162.51 against the euro.

Fuji Heavy Industries gained after it revised its fiscal year 2008 earnings forecast by 63% spurred by increased demand from Russia and China. Preliminary net income forecast for the six months ended September 30 was 7.8 billion-yen. The company also revised upwards net income forecast to 17 billion yen and sales were revised 0.6% up to 1.56 trillion yen for year ending March 31.

Financial stocks gained after the alliance between China based Citic Securities and the U.S. based Bear Stearns breathed optimism in the financial markets. Mitsubishi UFJ Financial Group gained 1.85%, Mizuho Financial Group edged up 0.65% and Sumitomo Mitsui Financial Group 2.28%.

Technology stocks rose on bullish sentiment stocked by Nikkei reports Hitachi Limited would withdraw from the personal computer business thereby increasing the profitability of other computer makers. Sony Corp and Toshiba jumped 0.19% and 1.77% respectively on the news.

Seiyu Limited, discount supermarket operator, jumped to the daily limit of 30 yen to 117 yen after Wal-Mart said that it will offer 140 yen per share for the rest of the 50% of the company that it does not own. The struggling supermarket chain has failed to generate profit and sustain market share.

All Nippon Airways would be offering 10% to 15% cheaper flights via Tokyo, Osaka and Nagoya, in the fiscal year 2009 starting April 1st of 2008. Furthermore it will cut seven direct routes linking cities to increase the percentage seats filled during flights.