Monday, 28 February 2011

Japanese Stocks Advance for Third Day on Oil, U.S. Economy; Shinsei Jumps

Japanese stocks rose for a third day after a decline in oil prices eased concern about energy costs and U.S. data showing higher personal incomes boosted confidence in economic growth.
Honda Motor Co., Japan’s second-biggest carmaker, gained 1.3 percent. TDK Corp., the world’s No. 1 maker of disk drive heads, advanced 1.8 percent. Shinsei Bank Ltd. surged 7.7 percent after the lender partly owned by J. Christopher Flowers had its rating increased at Credit Suisse Group AG. Dentsu Inc., Japan’s largest advertising company, leapt 4.3 percent after Facebook Inc. hired it as a sales and marketing representative.
The Nikkei 225 Stock Average rose 0.8 percent to 10,705.42 as of 9:43 a.m. in Tokyo, advancing for a third day, after declining 2.9 percent last week on concern unrest in Libya would drive up oil prices. The broader Topix index gained 1.1 percent to 961.35, with all 33 of the index’s industry groups advancing. Six stocks climbed for each that fell.
“Although there’s still uncertainty about what’s happening in North Africa and the Middle East, easing crude futures are supportive” for the stock market, said Fumiyuki Nakanishi a strategist at Tokyo-based SMBC Friend Securities Co. “The data continues to show the economy is steadily improving.”
Futures on the Standard & Poor’s 500 Index gained 0.2 percent today. The index advanced 0.6 percent in New York yesterday after reports showed personal income improved more than economists expected and a measure of U.S. business conditions rose to its highest level in more than 22 years.

Higher U.S. Incomes

The Topix increased 5.8 percent through yesterday in 2011, the most among the major Asia-Pacific benchmark indexes. Stocks in the Japanese benchmark are valued at 16 times estimated earnings on average, compared with 13.8 times for the S&P 500 and 11.4 times for the Stoxx Europe 600.
In the U.S., incomes climbed 1 percent in January, exceeding the median forecast of economists surveyed and the most since May 2009, the U.S. Commerce Department said yesterday.
The Institute for Supply Management-Chicago Inc. said yesterday its business barometer rose to 71.2 in February, the highest level since July 1988, from 68.8 in January. Figures greater than 50 signal expansion. The gauge, which was projected to fall, exceeded every estimate of economists surveyed by Bloomberg News.
Crude oil for April delivery declined 0.9 percent to settle at $96.97 a barrel in New York yesterday, the biggest daily drop since Feb. 11, after Saudi Arabia offered to make up for supplies lost because of unrest in Libya.

Yen Relief

Honda gained 1.3 percent to 3,590 yen. TDK advanced 1.8 percent to 5,590 yen. Toshiba Corp., a nuclear power-plant maker, increased 0.9 percent to 540 yen.
The yen fell to as low as 81.98 against the dollar, compared with 81.66 at the close of stock trading in Tokyo yesterday. Against the euro, Japan’s currency weakened to 113.35 from 112.39. A weaker yen boosts the value of overseas income at Japanese companies when converted into their home currency.
Banks were the biggest support for the Topix. Shinsei Bank surged 7.7 percent to 112 yen, the Nikkei’s largest gain, after the company had its rating increased to “outperform” from “neutral” at Credit Suisse Group. Mitsubishi UFJ Financial Group Inc., Japan’s largest bank by market value, climbed 2.4 percent to 464 yen. Sumitomo Mitsui Financial Group Inc., Japan’s second-largest, gained 2.4 percent to 3,160 yen.
Dentsu Jumps
Dentsu leapt 4.3 percent to 2,707 yen and was the biggest single contributor to the Nikkei’s gain. Dentsu will provide consulting services for companies that want to use Facebook for advertising and marketing, the Japanese company said in a statement yesterday. Dentsu will have exclusive rights to sell space on Facebook’s premium ad service for one year, according to the statement.
Mitsubishi Heavy Industries Ltd. climbed 2.9 percent to 357 yen after the Nikkei newspaper reported the equipment maker won a 20 billion yen ($244 million) order supplying tankers to Nippon Yusen K.K. It was the first order of its kind for the company in about four years, according to the report.


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