Nikkei Index Up 1%; JGC $1.5 Contract

Darlington Musarurwa
08 Jun, 2009
New York City

Stocks in Japan increased after the U.S. unemployment in May was less than expected. Exporters led the gainers. JGC surged after the company was selected by Algerian state oil and gas company for $1.5 billion contract. Japan''s current account surplus drops 54.5% in April.

[R]5:00AM New York, 7:00PM Tokyo – Stocks in Japan increased after the U.S. unemployment in May was less than expected. Exporters led the gainers. JGC surged after the company was selected by Algerian state oil and gas company for $1.5 billion contract. Japan current account surplus drops 54.5% in April.[/R]

The benchmark stock index advanced 1% in Tokyo lifted by financial stocks after the U.S. Labor Department reported payrolls fell 345,000 in May. Economists were expecting a loss of 520,000. Unemployment in May surged to 25-year high of 9.4%.

Market gains were trimmed by a government report showing the country’s trade surplus shrank more than forecasted in April.

Nikkei 225 Index rose 1% or 97.62 to 9,865.63, and the broader Topix Index increased 1.1% or 10.33 to 926.89.

In the first section of the Tokyo Stock Exchange 23.1 billion shares worth 1.5 trillion yen were traded and in the section 501 million shares valued at 5.6 billion yen changed hands.

Commodity stocks dropped after crude oil prices decreased 0.5% to $68.40 per barrel and gold prices plunged 2.1% to $962.6 per ounce. Sumitomo Metal Mining fell 2.7% and Toho Zinc declined 2.3%.

Japan’s Trade Surplus Falls 54.5% in April

Japan’s Ministry of Finance reported today that current account surplus contracted 54.5% to 630.5 billion yen in April after dropping 45.6% in March on weak exports.

Economists had earlier forecasted that the surplus will shrink by 42% to 806.6 billion yen.

Exports declined 40.6% to 3.9 trillion yen from a decline of 46.5% in March. Imports plunged 37.8% in the month to 3.7 trillion on lower oil prices. Oil prices have declined 53.1% from a year ago.

Gainers & Losers

JGC Corp surged 4.4% to 1,609 yen after the company was awarded $1.5 billion of contract by the Algeria controlled oil company Sonatrach. The engineering and procurement contract for gas gathering facility with throughput of 12 mmscmd gas gathering and product pipeline as well as installation in the Gassi Touil field.

Exporters surged after the U.S. reported lower than expected rise in unemployment in May.

Toyota Motor Corp increased 1.3% to 3,910 yen, Mazda surged 6.1% to 294 yen and Isuzu Motors Ltd increased 6.6% to 178 yen.

Toyota estimates production cost reduction of 100 billion yen by 2012 according to a report in Nikkei newspaper.

Nikkei 200 Average Movers

Tokyo Electron Ltd led the decliners in the Nikkei 225 index of 3.8% followed by losses in Panasonic Corp. of 3.4%, in Nippon Paper Group Inc of 3.0%, in Sumitomo Metal Mining Co Ltd of 2.7% and in Toho Zinc Co. Ltd of 2.3%.

Mizuho Trust & Banking Co Ltd led gainers in the Nikkei 225 index with a rise of 11.7% followed by gains in Mizuho Financial Group Inc. of 7.4%, in Isuzu Motors Ltd of 6.5% and Sumitomo Mitsui Financial Group Inc of 6.3%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 97.62 or 1.00% to 9,865.63, Hang Seng index in Hong Kong decreased 426.14 or 2.28% closed to 18,253.39, CSI 300 index in China higher 9.17 or 0.31% closed to 2,948.48.The KL Composite index in Malaysia lower 2.65 or 0.25% closed to 1,072.85.The Markets of Australia were closed today.

The Kospi Index in South Korea decreased 1.41 or 0.10% to close at 1,393.30. SET index in Thailand closed lower 4.54 or 0.75% to 600.03 and JSE Index in Indonesia decreased 22.28 or 1.07% closed to 2,056.65. The Sensex index in India decreased 437.63 or 2.90% closed to 14,665.92.