Nikkei in Tokyo Up 1.4%

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

Tokyo stocks regained their footing as Nikkei 225 index increasd 1.4% to 16,505.63 on a recovery in banking stocks. Honda and Sony jumped nearly 9% after reporting sharply higher than expected earnings. Nissan reported sales increase of 12% and operating income rise of 13% on better sales in Middle East, Russia, and China. Sales in China rose 25% and in Middle East jumped 21%. Sales in Japan fell 7%. Sharp rise in oil lifted energy stocks. Daiwan Securities profit declined 14%.

[R]6:00AM New York, 7:00PM Tokyo – Investors returned for financial stocks. Earnings from Sony and Honda lead Tokyo up 1.36%. Consumer prices fell 0.2% in September from a year ago and industrial production declined 1.4% in the month.[/R]

Japan stock index rallied on better than expected earnings from Honda Motor Corp and Sony Corporation. Financial stocks also recovered as investors focused on domestic earnings in the sector.

In Tokyo trading Nikkei 225 firmed 1.36% or 221.46 to 16, 505.63, while the broader Topix Index edged up 1.7% or 25.90 to 1,573.98.

Of the Nikkei 225 stocks 141 gained, 72 declined, and 12 were unchanged. Honda Motor Corp led the gainers in the index rising 8.89% after reporting three months earnings profit to September jumped 63% to 208.5 billion yen.

Energy stocks climbed as oil topped $92 per barrel on growing battle between Kurdish rebels in northern Iraq and Turkish military and declining U.S. petroleum inventories. Inpex rose 3.25% to 1.27 million yen, Mitsubishi Corp firmed 4% to 3,640 yen, Mitsui & Company gained 5.6% to 3,030, and Nippon Oil Corp gained 1.59%.

In the first section of the Tokyo Stock Exchange 6.8 billion shares worth 1 trillion yen were traded and 145 million shares valued at 3.2 billion yen were traded.

The Ministry of Internal Affairs and Communication’s Statistics Bureau reported today that core consumer price index was unchanged in September from August but down 0.1% from a year ago. The Bank of Japan is meeting on October 31st to decide interest rate direction.

Statistics from the Ku-area in Tokyo, a key gauge of nationwide prices, revealed that food prices were up 0.2% for the month and 0.1% for the year, while fuel, light and water charges were unchanged for the month but firmed 0.2% over the previous year. Clothes and footwear prices gained 6.4% in September and 0.6 over last year. Reading and recreation fell 1.3% for the month and 1.2% for the year. Services plunged 0.4% from August, but rose 0.2% from last year.

However, for the month of October food prices fell 0.1% but rose 0.5% for the year. Housing remained unchanged from August and increased 0.2% for the year. Fuel, light and water were up 0.8% for the month and 1.2% from the previous year. Clothes and footwear gained 1.2% from August but tumbled 1.7% over the previous period last year. Service prices for October remained unchanged, while firming 0.3 over the corresponding period last year.

The Ministry of Economy, Trade and Industry said today industrial production fell 1.4% in September for the first time in two months, on a sharp rise of 3.5% in August when automakers resumed production after July 0.4% decline due to an earthquake. However, September production was up 0.8% from a year ago.

Seasonally adjusted production index decreased to 110.3, shipment index declined 1.9% to 114.5, and inventory index increased 1.0% to 97.0.

According to METI, industries such as general machinery, transport equipment, information and telecommunications electronic equipment in that order where the main contributors to the decline.

Shipments fell 1.9% in September, but climbed 2.1% for the year, and inventory increased 1% from previous month. However, the survey of production forecast in manufacturing showed production is expected to increase 3.8% in October and 0.7% in November.

Kyodo News reported today Land, Infrastructure and Transport Minister Tetsuzo Fuyushiba has raised concern over the acquisition of a 19.89% stake in Japan Airport Terminal Company by Macquarie Airports Management Limited of Australia.

Of the index shares, Honda Motor Corp led gainers, with a rise of 8.89%, followed by gains of 8.81% in Sony Corp, 8.74% in Softbank Corp, 7.27% in Matsushita Electric and 5.57% in Mitsui &Co.

Honda Motor Corp gained on strong second quarter performance. Operating profit rose 63% to 208.5 billion yen on weaker yen in the quarter and increased sales of fuel efficient Civic and Accord. The two models managed to lure customers from U.S. companies General Motors Corp and Ford Motor Corporation whose strength is in pick up cars and SUVs.

Honda projected operating revenues will rise by 10.9% in the fiscal year ending March 31 to 12.3 billion, while operating income is projected to soar 3.3% to 880 million yen. Net income is forecasted to rise 8% to 640 million yen. The company is planning a 22 yen dividend per share in the quarter and a full year dividend of 88 yen per share.

Sony also leapt after third quarter net income rose to 73.7 billion yen from 1.7 billion yen a year earlier spurred by 12% rise of sales to 2.08 trillion yen. Profits in the consumer electronics division climbed 106.9 billion compared to 8 billion yen a year earlier. The movie division jumped 2.7 billion in operating profit against to a 15.3 billion-yen loss a year before after the production of “Spider-Man 3” and “Resident Evil: Extinction”. Sony Financial Services, the largest IPO in Japan in 2007, is projected to generate 11 billion yen to profit during the quarter.

Ricoh Company Limited led decliners, falling 4.20%, followed by losses in Resona Holdings of 3.87%, in Toyo Seikan of 3.84%, in Shinsei Bank Limited of 3.66% and Nippon Soda Company of 3.29%.

Daiwa Securities reported today second quarter net profit declined 14% from 17 billion yen last year to 14.7 billion yen for the three months ending September 30. While revenues were unchanged at 211.7 billion yen, equity underwriting shares fell from 12.5 billion yen a year ago to 6.4 billion yen in the second quarter.

Mizuho Securities also reported today it experienced a net loss of 27.06 billion yen from a profit of 11 billion yen in the six months to September due to investment losses tied to the U.S. housing slump.

Nikkei reported today Sumitomo Mitsui Financial Group’s consolidated net profit is expected to fall 20% from 220 billion yen forecasted for half year to September. The stock advanced 1.21% on the rally in financial stocks.

Nissan Motor Corp said today operating profit rose 12% to 218.7 billion yen in the second quarter, buoyed by 13% increase in sales to 2.62 trillion yen as the company managed to gained new customers with its Qashqai SUV in Russia and Ukraine. The company currently has a six months backlog for the model in Russia, Ukraine and Northeastern Europe. Overseas sells in China and the Middle East rose 25 % and 21% respectively helping to offset a 7.2% decline in domestic sales.

Mobile company NTT DoCoMo released results today that showed net income fell 15% to 123.7 billion yen from 146.3 billion yen a year earlier as price were cut by 50% and 1.1 million customers defected from the mobile company. Operating profit dropped 16% to 204.6 billion yen. Sales dropped 1.9% to 1.14 trillion yen. The company said annual profits might miss target by 1.3%. NTT DoCoMo will be merging eight subsidiaries to enhance operational efficiency.