Nikkei up 0.9 pc as Fanuc, property shares rise

Tokyo, Mar 20: The Nikkei average rose 0.90 percent on Tuesday as Fanuc Ltd. climbed after it bought back about 2.6 percent of its own shares, and property shares such as Mitsui Fudosan Co. Ltd. gained ahead of a government report on land prices.

Shares in exporters such as Kyocera Corp. also advanced as the yen retreated further against the dollar.

Traders said positive technical signs have lifted market sentiment, encouraging investors to buy recently battered shares such as Mitsubishi UFJ Financial Group Inc. and other banks.

''The pessimistic view about the U.S. economy is receding,'' said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. ''Investors are turning more attention to domestic factors, while keeping the risks from the United States in mind.'' The Nikkei was up 153.65 points at 17,163.20, its highest close since March 12, after filling in a gap on the charts that opened up when the index tumbled last week on concerns about the U.S. subprime mortgage crisis.

As the currency market and U.S. stocks are showing signs of stabilising, investors have resumed buying shares of companies with good earnings prospects, or those that have been sold off recently, Ichiyoshi's Akino said.

Investors bought technology shares such as chip equipment makers that had been sold heavily due to concerns about a firmer yen and supply/demand conditions in the semiconductor market.

Shares of companies dependent on domestic demand such as real estate developers were also bought as they are less vulnerable to currency movements and U.S. economic conditions, he added.

The Bank of Japan's decision earlier in the day to keep interest rates unchanged at 0.5 percent was widely expected and had little impact on the market.

The broad TOPIX index added 0.84 percent to 1,708.29.

The Tokyo markets will be closed on Wednesday for a national holiday.

BANK SHARES REBOUND Bank shares 174ained some ground. Mitsubishi UFJ, Japan's largest banking group, closed up 2.3 percent at 1.32 million yen after falling to its lowest since October 2005 the previous session on concerns about their earnings.

Takahiko Murai, general manager of equities at Nozomi Securities, said Japanese bank shares drew support from a recovery in U.S. financial stocks that had been hit by the mortgage market turmoil.

News that Britain's Barclays Plc and Dutch bank ABN AMRO confirmed they were in talks to merge also ignited speculation for further industry shake-up.

''Consolidation in the banking sector is proceeding on a global scale, and Japanese banks may be caught up in that movement,'' he said.

Shares of Fanuc Ltd. gained 2.8 percent to 10,790 yen, becoming the largest contributor to the Nikkei's rise, after the Japanese machinery maker said it had bought back 64.6 billion yen (9 million) worth of its own shares before the market opened on Tuesday.

Japanese electronics group Fujitsu Ltd. said it had sold 6.6 million shares of Fanuc for about 70 billion yen (4.3 million) on Tuesday, lowering its stake in the industrial robot maker to 5.0 percent.

After the close of trade, Fujitsu said it would post a net loss of 275 billion yen (Tokyo, Mar 20: The Nikkei average rose 0.90 percent on Tuesday as Fanuc Ltd. climbed after it bought back about 2.6 percent of its own shares, and property shares such as Mitsui Fudosan Co. Ltd. gained ahead of a government report on land prices.

Shares in exporters such as Kyocera Corp. also advanced as the yen retreated further against the dollar.

Traders said positive technical signs have lifted market sentiment, encouraging investors to buy recently battered shares such as Mitsubishi UFJ Financial Group Inc. and other banks.

''The pessimistic view about the U.S. economy is receding,'' said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. ''Investors are turning more attention to domestic factors, while keeping the risks from the United States in mind.'' The Nikkei was up 153.65 points at 17,163.20, its highest close since March 12, after filling in a gap on the charts that opened up when the index tumbled last week on concerns about the U.S. subprime mortgage crisis.

As the currency market and U.S. stocks are showing signs of stabilising, investors have resumed buying shares of companies with good earnings prospects, or those that have been sold off recently, Ichiyoshi's Akino said.

Investors bought technology shares such as chip equipment makers that had been sold heavily due to concerns about a firmer yen and supply/demand conditions in the semiconductor market.

Shares of companies dependent on domestic demand such as real estate developers were also bought as they are less vulnerable to currency movements and U.S. economic conditions, he added.

The Bank of Japan's decision earlier in the day to keep interest rates unchanged at 0.5 percent was widely expected and had little impact on the market.

The broad TOPIX index added 0.84 percent to 1,708.29.

The Tokyo markets will be closed on Wednesday for a national holiday.

BANK SHARES REBOUND Bank shares 174ained some ground. Mitsubishi UFJ, Japan's largest banking group, closed up 2.3 percent at 1.32 million yen after falling to its lowest since October 2005 the previous session on concerns about their earnings.

Takahiko Murai, general manager of equities at Nozomi Securities, said Japanese bank shares drew support from a recovery in U.S. financial stocks that had been hit by the mortgage market turmoil.

News that Britain's Barclays Plc and Dutch bank ABN AMRO confirmed they were in talks to merge also ignited speculation for further industry shake-up.

''Consolidation in the banking sector is proceeding on a global scale, and Japanese banks may be caught up in that movement,'' he said.

Shares of Fanuc Ltd. gained 2.8 percent to 10,790 yen, becoming the largest contributor to the Nikkei's rise, after the Japanese machinery maker said it had bought back 64.6 billion yen ($549 million) worth of its own shares before the market opened on Tuesday.

Japanese electronics group Fujitsu Ltd. said it had sold 6.6 million shares of Fanuc for about 70 billion yen ($594.3 million) on Tuesday, lowering its stake in the industrial robot maker to 5.0 percent.

After the close of trade, Fujitsu said it would post a net loss of 275 billion yen ($2.34 billion) on a parent basis instead of a profit after writing off valuation losses on stockholdings in overseas units.

Property shares gained on expectations for a bullish reading in the government's report on land price data due on Thursday.

Mitsubishi Estate Co. Ltd. added 3.6 percent to 3,780 yen, and Sumitomo Realty & Development Co. Ltd. rose 2.2 percent to 4,590 yen.

Mitsui Fudosan Co. Ltd., Japan's largest property firm, jumped 4.0 percent to 3,360 yen after brokerage Goldman Sachs lifted its earnings estimates and target share price for the real estate developer, saying it should benefit from higher land prices in southern Tokyo.

Exporters also rose, benefiting from a weaker yen, which boosts the value of their overseas earnings when converted back into the Japanese currency. Kyocera added 1.1 percent to 10,940 yen, while Toyota Motor Corp. gained 0.9 percent to 7,740 yen.

Trade volume remained low, with 1.9 billion shares changing hands on the Tokyo exchange's first section. Advancing shares beat decliners by a ratio of about three to one.

Reuters.34 billion) on a parent basis instead of a profit after writing off valuation losses on stockholdings in overseas units.

Property shares gained on expectations for a bullish reading in the government's report on land price data due on Thursday.

Mitsubishi Estate Co. Ltd. added 3.6 percent to 3,780 yen, and Sumitomo Realty &Development Co. Ltd. rose 2.2 percent to 4,590 yen.

Mitsui Fudosan Co. Ltd., Japan's largest property firm, jumped 4.0 percent to 3,360 yen after brokerage Goldman Sachs lifted its earnings estimates and target share price for the real estate developer, saying it should benefit from higher land prices in southern Tokyo.

Exporters also rose, benefiting from a weaker yen, which boosts the value of their overseas earnings when converted back into the Japanese currency. Kyocera added 1.1 percent to 10,940 yen, while Toyota Motor Corp. gained 0.9 percent to 7,740 yen.

Trade volume remained low, with 1.9 billion shares changing hands on the Tokyo exchange's first section. Advancing shares beat decliners by a ratio of about three to one.

Reuters