Strength in Japanese Stocks on Economic Views

123jump.com Staff
14 Oct, 2009
New York City

Stocks in Japan are expected to trade higher after a worldwide rally lifted stocks. Commodities and crude oil prices gained. Banks in Japan traded lower as the government plan offers loan moratorium to small businesses. Consumer confidence advances for the ninth month in a row.

[R]7:00 AM Tokyo – Stocks in Japan are expected to trade higher after a worldwide rally lifted stocks. Commodities and crude oil prices gained. Banks in Japan traded lower as the government plan offers loan moratorium to small businesses. Consumer confidence advances for the ninth month in a row.[/R]

World markets rallied on the back of improved sentiment and better than expected economic data.

In New York trading, the Dow increased above 10,000 for the first time since October 3 close in 2008. The gain of 1.5% today lifted the index to 10,015.86 and it has rebounded 53% from its low on March 9. The index is still 29% below its high of 14,164.53.

China reported smallest decline in exports in September that sparked a rally in commodities. UK reported record unemployment rate of 7.9% but the quarterly increase in jobless people was the smallest in a year. U.S. reported smaller than expected decline in retail sales and strong earnings from Intel, JP Morgan Chase and CSX.

In Wednesday’s trading in Tokyo, the Nikkei 225 Index in Tokyo closed lower 16.35 or 0.16% to 10,060.21. The index declined after a six-day rally.

The Cabinet Office in Japan reported confidence index increased for the ninth month in a row in September. The index increased to 40.5 after dropping to the low of 26.2 in March. The economic revival and expectations of better job market has propelled the index this year but investors and consumers are still skeptical.

Producer prices declined 7.9% in September from a year ago.

Tokyo Gainers & Losers

Banks closed lower on the worries that the government plan of loan moratorium for small businesses will hurt earnings. Financial Services Minister Shizuka Kamei confirmed that the government has drafted a plan for a 3-year moratorium.

Mitsubishi UFJ Financial Group decreased 3.2% to 485 yen and Shinsei Bank dropped 4.6% to 124 yen.

Elpida Memory Inc is likely to report its first quarterly loss in the quarter ended in September according to an article in Nikkei News. Sales are expected to rise 32% to 96 billion yen.

Japan Airlines is likely to look for debt relief and loan covenant waivers to the tune of 300 billion yen according to a report in Nikkei News.

Mazda Motor Corp declined 6.4% to 220 yen after it reported it plans to raise as much as 93.6 billion yen to investors at 213 yen. The company plans to use the funds to develop new fuel efficient vehicles.

Separately, the auto maker also said it lost 26 billion yen in the first half and tightened its full year loss estimate to 26 billion yen from 50 billion yen and revised the global vehicles sales to 1.155 million from 1.1 million.

Sofmap Company, the leading computer retailer surged 19% to 05 yen after it agreed to be acquired by Bic Camera Inc in a share exchange transaction. Bic decreased 1.4% to 32,500 yen. The retail industry is consolidating as sales slump and earnings evaporate.

Under the merger terms, Bic plans to offer 0.005 share for every share of Sofmap and the company will operate as a wholly owned subsidiary. Bic owns 57.8% stake in the retailer

Nikkei 200 Average Movers

Mazda Motor Corporation led the decliners in the Nikkei 225 index of 6.3% followed by losses in The Sumitomo Trust and Banking Company, Limited of 5.2%, in Pioneer Corporation of 4.9%, in Mizuho Financial Group, Inc. of 4.8% and in Sumitomo Mitsui Financial Group, Inc. of 4.6%.

Fast Retailing Co., Ltd led gainers in the Nikkei 225 index with a rise of 6.0% followed by gains Kao Corporation of 3.8%, in East Japan Railway Company of 3.7% and in Taisei Corporation of 2.9%.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 16.35 or 0.16% to 10,060.21, Hang Seng index in Hong Kong increased 419.12 or 1.95% to 21,886.48, and CSI 300 index in China higher 28.88 or 0.90% to 3,227.40. ASX 200 index in Australia increased 45.40 or 0.95% to 4,831.10. The FTSE Bursa KL Composite index in Malaysia was higher 13.33 or 1.08% to 1,246.84.

The Kospi Index in South Korea increased 20.16 or 1.24% to close at 1,649.09 SET index in Thailand closed lower 15.20 or 2.04% to 731.47. JSE Index in Indonesia increased 39.73 or 1.61% to 2,511.72. The Sensex index in India increased 204.44 or 1.20% to 17,231.11.