Stocks Rise 2%, Commodites Fall

123jump.com Staff
11 Aug, 2008
New York City

A fall in crude oil price in the region and higher close in New York on Friday lifted market sentiment in Tokyo. Benchmark index added 2% on active trading. Bankruptcies in Japan rose 13% in July on tighter lending conditions and net properties purchased by real estate trusts fell 50% to 94 in the first half of this year. Hitachi Zosen led advancers with a rise of 12% and Itochu led decliners with a loss of 4%.

[R]5:00AM New York, 7:00PM Tokyo- Falling crude oil and weakening yen spurs Tokyo.[/R]

Japan market averages rose after a weakening yen drove exporters higher, while falling crude oil prices also stoked expectations that falling prices may relieve pressure on corporate profits.

Market Sentiment

In Tokyo trading Nikkei 225 rose 1.99% or 262.5 to 13,430.91, and the broader Topix Index advanced 1.6% or 20.07 to 1,280.08.

In the first section of the Tokyo Stock Exchange 8.5 billion shares valued at 808 billion yen were traded and in the second section 137 million shares worth 1.8 billion yen changed hands.

Of the Nikkei 225 stocks 186 rose, 36 declined, and 3 were unchanged. Hitachi Zosen led advancers in the index shares with a rise of 11.22% followed by Showa Denko K.K advancing 7.66%.

Japan Business Failures Rise 13% in July

JapanToday reported on its Web site today that Tokyo Shoko Research said the number of corporate bankruptcies increased 12.9% from a year ago to 1,372 on rising debt level on the companies’ balance sheet.

The report notes that the construction and real estate industries were heavily affected by the tougher financial environment fueled by the growing U.S. subprime mortgage crisis and exacerbated by the soaring raw material and crude oil prices.

Liabilities of these companies rose 90.2% to 665.33 billion yen from the same period a year ago.

Net Purchases of Properties Fall 50% in H1

The Nikkei News reported today that the number of net purchases of properties by real estate investment trusts fell 50% to 94 in the first six months of the year from the comparable period a year ago.

Gainers & Losers

Hitachi Zosen led advancers in the Nikkei 225 index shares with a rise of 11.22% followed by increases in Showa Denko K.K of 7.66%, in Fukuoka Financial of 6.90%, in Fuji Heavy Industries of 6.87%, and Comsys Holdings of 6.73%.

Exporters also gained after the yen closed at 109.95 against the dollar and falling oil and commodity prices lured investors to the dollar. Nikon Corp spiked 5.82%, Nissan edged up 4.27%, Honda rallied 4.61% and Toyota advanced 4.14%.

Itochu Corp. led decliners in the Nikkei 225 index shares with a fall of 4.08% followed by losses in Nisshin Seifun of 2.59%, in Chugai Pharmaceutical Co. of 2.20%, in Japan Tobacco of 2.14%, and Kawasaki Kisen of 1.91%

Commodity stocks slump as oil traded below $117 a barrel. After crude oil prices for September delivery dropped 4% to $115 a barrel, prices edged up to $116 per barrel as the conflict between Russia and Georgia escalated, raising fears of supply disruptions.

Copper, zinc and nickel also slipped 3.5%, 3.4% and 3.7% respectively on Friday. Mitsui & Co shed 1.80%, Mitsubishi Corp declined 1.82% and Nippon Oil slid 1.24% as a result.

Company News

AFP reported on Friday last week that Sanyo Electric Co. says its unit in Vietnam will built a new plant worth US$95 million to shore up the production of optical pickups for DVD recorders and other electronic devices.

The company added that the construction of the factory- which will hire an estimated 12,000 workers- in the Bac Giang Province will commence in September and operations will begin in April next year.

According to the company, the new firm will be wholly controlled by Shenzhen Sanyo Huaqiang Optical Technology Co. of China, which is 60% owned by Sanyo, while the remainder will be held by a Chinese partner.