• search

Nikkei up 1.3 pc, exporters rebound on weaker yen

By Staff
Google Oneindia News

Tokyo, Mar 15: The Nikkei average rose 1.29 percent on Thursday, led by exporters such as Sony Corp., as concerns about their earnings receded following a recovery in U.S. stocks and the yen's retreat against the dollar.

Relieved by a halt to a slide in global share prices, investors resumed buying shares of companies with good earnings prospects such as property and steel firms including Nippon Steel Corp.

Softbank Corp. has become the largest contributor to the Nikkei's rise, climbing 5.4 percent to 2,915 yen after Daiwa Institute of Research started covering it with a ''1'' rating and set a one-year target price of 4,000 yen.

Chubu Electric Power Co. gained 3.8 percent to 4,150 yen after the Nikkei business daily reported that British hedge fund TCI has acquired at least a 1 percent stake in Chubu and asked it for higher dividends and share buybacks.

Yasuo Yabe, director of sales at Meiwa Securities, said investors were still cautious about the U.S. economic outlook after the Tokyo market booked its second-biggest daily percentage fall this year on Wednesday on concerns about mounting problems in the U.S. subprime mortgage sector. The sector serves borrowers with poor credit histories and charges higher interest rates.

''The Nikkei has recouped just half the losses it sustained yesterday,'' he said. ''Investors are pondering whether subprime mortgage problems will have a broader economic impact or not.'' The Nikkei was up 214.91 points at 16,891.80 at 0453 GMT. The broad TOPIX index rose 1.35 percent to 1,697.49.

The rise in the market shows worries about the subprime mortgage sector have receded for now, said Tsuyoshi Nomaguchi, a strategist in Japanese equity research at Daiwa Securities' investment advisory department.

''But it's unclear if the U.S. market has completely digested the subprime mortgage issue, and a series of economic indicators due later this week will be closely watched,'' he said.

Yabe at Meiwa Securities said the Nikkei is likely to consolidate between 16,500 and 17,300 until it gets a boost from full-year corporate earnings reports due to start next month.

Shares in exporters benefited from a weaker yen, with Canon up 2.1 percent at 6,270 yen and Honda Motor Co. Ltd. adding 2.0 percent to 4,190 yen.

A weaker yen is a boon to companies that make the bulk of their sales abroad because it boosts profits when earnings from abroad are brought home.

Mitsubishi Heavy Industries Ltd. jumped 9.5 percent to 718 yen after it won an order to build two nuclear reactors for U.S.

power plant operator TXU Corp. in its first overseas reactor deal, estimated to be worth as much as .2 billion.

Shares in Nikko Cordial Corp. rose 0.1 percent to 1,692 yen, just below the 1,700 yen per share being offered by Citigroup in its .6 billion buyout offer for Japan's third-biggest brokerage.

Citigroup began accepting tenders on Thursday. It had raised its offer price earlier in the week from 1,350 yen, but Japan Chief Executive Douglas Peterson said on Wednesday the new offer was final.



For Daily Alerts
Best Deals and Discounts
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X