Tokyo Stocks Rise, Matsushita Earnings Surge

123jump.com Staff
30 Jul, 2008
New York City

Stocks in Japan rallied after a fall in crude oil prices in the region, a sharp rise in Matsushita earnings and expectations of better economic conditions in the U.S. June industrial production in Japan fell 2%. In earnings news, Matsushita earnings in the first quarter rose 86% to 73 billion yen. Nidec, precision motor maker reported 36% rise in net income to 15 billion yen.

[R]5:00AM New York, 7:00PM Tokyo - Industrial production in Japan declines 2% in June. Net income at Matsushita jumps 86% and at Nidec rises 36%.[/R]

Stocks in Japan rallied buoyed by a fall in crude oil prices and a rise in unexpected U.S. consumer confidence in July. Robust earnings from Matsushita Electrical Industrial Co also helped to solidify gains and market sentiment.

Market Sentiment

In Tokyo trading Nikkei 225 rose 1.58% or 208.34 at 13,367.79, and the broader Topix Index advanced 1.7% or 21.35 at 1,302.99.

In the first section of the Tokyo Stock Exchange 8 billion shares worth 913 billion yen were traded and in the second section 138 million shares valued at 3.5 billion yen changed hands.

Of the Nikkei 225 stocks 187 rose, 29 declined, and 9 were unchanged. Aeon Co Ltd led advancers in the index shares with a rise of 7.69% followed by Nisshin Seifun gaining 6.41%.

June Industrial Production Falls 2%

The Ministry of Economy Trade and Industry reported on its Web site today that industrial production dropped 2% at 107.1 from May, but rose 0.2% from a year earlier.

Industries that mainly contributed to the decline include transport equipment, general machinery and other industry in that order, while commodities that contributed to the fall were large passenger cars, semiconductor products machinery, and small passenger cars correspondingly.

METI also noted that shipments fell 3% from May at 106.9 and declined 0.6% from the same period a year ago as transport equipment, general machinery, and electrical machinery in that order weighed on exports.

Also inventory in June gained 1.2% from the previous month, showing an increase for the second consecutive month at 106 and rose 2.8% from the previous year.

The industries that mainly contributed to the increase in inventory were electronic parts and devices, fabricated metals, ceramics and stone and clay products correspondingly.

According to the Survey of Production Forecast in Manufacturing, production is expected to decline 0.2% in July and to further fall 0.6% in August.

Production is expected to fall in July on lower demand for electronic parts and devices, information and communication electronics equipment, and chemicals, and August production is expected to drop on a fall in demand for transport equipment, general machinery and communication electronics equipment respectively.

US Consumer Confidence Rises in July

The New York based Conference Board reported yesterday that its Consumer Confidence Index increased to 51.9 in July from a revised 51.0 in June. Market watchers expected the index to fall marginally to 50.

However the Present Situation Index, which gauges shoppers’ sentiments, declined marginally to 65.3 from 65.4 and the Expectations Index, which measures consumers'' outlook for the next six months, increased to 43.0 in July from 41.4.

Lynn Franco, director of the Conference Board Consumer Research Center, said the modest improvement in expectations, which is most often a harbinger of economic times to come, “bears careful watching over the next few months”.

Gainers & Losers

Aeon Co Ltd led advancers in the Nikkei 225 index shares with a rise of 7.69% followed by rises in Nisshin Seifun of 6.41%, in Toho Zinc Co Ltd of 6.24%, in Toto Ltd of 5.71%, and Shinko Securities of 5.52%.

Fuji Electric led decliners in the Nikkei 225 index shares with a fall of 10.03% followed by losses in Kuraray Co Ltd of 8.41%, in NGK Insulators of 7.81%, in GS Yuasa Corp of 5.09%, and Denso Corp of 4.14%.

Matsushita Profit Rises 86%

Matsushita net income in the first quarter ended June 30 rose 86% to 73 billion yen in the same quarter a year earlier. Operating profit advanced 48% to 109.6 billion yen from 73.9 billion a year ago on sales gains in real terms and cost reduction.

Nidec Q1 Profit Rises 36%

Nidec Corp, the maker of computer disk drive motors rose 10% 7,748 yen after it reported first quarter income gain of 36% on higher sales of precision drives for computer hard disks and gains in foreign exchange. Net sales in the period rose 3.6% from a year ago to 178.4 billion yen and net income rose 36% to 15 billion yen. Earnings per diluted share rose to 101.27 yen from 74.63 yen a year ago period. Financial forecast for the full year sales remain unchanged at 800 billion yen and net income per share of 400.17 yen.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 208.34 or 1.58% to 13,367.79, Hang Seng index in Hong Kong increased 432.60 or 1.94% closed to 22,690.60. ASX 200 index in Australia increased 89.30 or 1.84% to close 4,936.70. The KL Composite index in Malaysia increased 9.14 or 0.79% closed to 1,159.94.

The Kospi Index in South Korea increased 10.50 or 0.67% to close at 1,577.70. SET index in Thailand closed lower 6.83 or 1.01% to 669.90. The Sensex index in India increased 495.67 or 3.59% to 14,287.21. Market of Indonesia was closed today.