Nikkei up 2 pct as Spain, global growth worries ease

TOKYO Wed Apr 18, 2012 12:37pm IST

A man passing an electronic board displaying share prices is reflected in a rearview mirror of a taxi in Tokyo April 16, 2010. REUTERS/Yuriko Nakao/Files

A man passing an electronic board displaying share prices is reflected in a rearview mirror of a taxi in Tokyo April 16, 2010.

Credit: Reuters/Yuriko Nakao/Files

Related Topics

Stocks

   

TOKYO (Reuters) - Japan's Nikkei index rallied 2.1 percent on Wednesday on robust U.S. corporate earnings, firm demand for Spanish debt and an upbeat German economic sentiment survey, with signals that the Bank of Japan may take more easing steps also providing momentum.

Mike Newman, head of research at Macquarie in Japan, said investors need to be selective in picking stocks, however, as the first quarter rally has petered out.

"Now the beta rally is behind us it now comes to individual companies to deliver sustained earnings. Toyota Motor and Yokogawa Electric are two examples of stocks that we think have good long term fundamentals to generate those sustained earnings," he said.

The Nikkei closed 202.55 points higher at 9,667.26, breaking above its 13-week moving average near 9,583, after falling below the psychologically key 9,500 mark on Monday.

The index has lost 5.7 percent since hitting a one-year peak on March 27, however.

BOJ Deputy Governor Kiyohiko Nishimura said the central bank is ready to take additional steps to ease monetary policy as necessary, also helping to lift sentiment after this week's sell-off on concerns over Spain's ability to finance its debt.

Toyota Motor Corp (7203.T), industrial robot maker Fanuc Corp (6954.T) and TDK Corp (6762.T) were among exporters that were in demand, up between 2.8 and 3.7 percent as improved global risk appetite helped push the yen lower.

The broader Topix advanced 2 percent to 819.27.

Trading volume on the main board remained light, with 1.67 billion shares changing hands, up from 1.54 billion shares on Tuesday but down from last week's average of 1.92 billion.

"There are a lot of companies reporting this week in the U.S. ... I think just ahead of numbers, people are a little bit reluctant to put stuff to work," a senior dealer at a foreign bank said.

STILL DOWNBEAT ON JAPAN

Financials were also in demand as concerns over Spain eased somewhat after the country raised more funding than planned at its bill auction on Tuesday.

Sentiment also improved after German analyst and investor confidence rose unexpectedly in April to a high not seen since June 2010, while the U.S. company earnings season has had a surprisingly strong start.

Nomura Holdings (8604.T), Japan's top investment bank, surged 3.8 percent. Megabanks Mitsubishi UFJ Financial Group (8306.T), Sumitomo Mitsui Financial Group (8316.T) and Mizuho Financial Group (8411.T) gained between 2.4 and 3.2 percent.

Nippon Electric Glass (5214.T) bucked the trend, down 1.7 percent after JPMorgan cut the company to "underweight" from "neutral", citing a decline in earnings from its key LCD glass segment.

Global investors' appetite towards Japanese equities has waned in April.

A monthly survey of asset managers by Bank of America Merrill Lynch showed investor allocation in Japanese stocks fell to 10 percent net underweight this month from 4 percent in March, but still above February's net 23 percent underweight.

The Topix carried a 12-month forward price-to-earnings ratio of 12.3, slightly cheaper than the U.S. S&P 500's 12.5 but more expensive than the STOXX Europe 600's 10, data from Thomson Reuters Datastream showed.

(Editing by Edwina Gibbs)

FILED UNDER:

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage