Japan Stocks Gain as Brokerages, Oil Companies Rise on Economy
January 18, 2012, 6:22 PM ESTBy Norie Kuboyama and Toshiro Hasegawa
Jan. 18 (Bloomberg) -- Japanese stocks rose, with the Nikkei 225 Stock Average closing at its highest level in two weeks, as brokerages and oil companies advanced amid signs the global economy is recovering in the face of Europe’s debt crisis.
Nomura Holdings Inc. paced gains among brokerages, which rose the most among the 33 industry groups on the Topix Index. Inpex Corp., Japan’s top oil explorer, added 1.8 percent after crude prices gained. Fanuc Corp. a maker of factory equipment, climbed 4.2 percent after orders for Japanese machine tools increased. Tokyo Electric Power Co. jumped after raising rates.
The Nikkei 225 Stock Average advanced 1 percent to 8,550.58 at the 3 p.m. close in Tokyo, the highest since Jan. 4. The gauge traded within a narrow range during the morning session and surged as much as 1.5 percent in the afternoon, boosted by a large buy order for Nikkei futures, according to Toshiki Morimoto, head of program trading at Tokyo-based Okasan Securities Co. The broader Topix finished the day up 0.5 percent.
“Concern about a slowdown in the global economy is receding,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
The Nikkei 225 advanced the most among the main Asia- Pacific indexes today. Hong Kong’s Hang Seng Index was little changed, while Australia’s S&P/ASX 200 advanced 0.1 percent, and South Korea’s Kospi Index slipped less than 0.1 percent.
Japanese shares rose today even after Fitch Ratings Managing Director Edward Parker said Greece is insolvent and probably won’t be able to honor a bond payment in March.
‘Domino Effect’?
“The market has already priced-in a Greek default,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at Tokyo-based T&D Asset Management Co. “The concern is that there will be a domino effect across the whole region.”
Stocks were buoyed by a report yesterday that signaled U.S. manufacturing is expanding, while confidence among German investors rose more than analysts estimated.
Brokerages, an industry group that dropped by half last year, led gains today. Nomura, Japan’s biggest securities firm, advanced 2.4 percent to 256 yen. SBI Holdings Inc., which operates an online brokerage and an alternative trading platform, climbed 6 percent to 5,620 yen after the securities regulator said it may consider rule changes to make it easier for new markets to compete with Japan’s traditional exchanges.
Inpex, Fanuc
Energy companies advanced after crude oil for February delivery rose for a second day in New York to as high as $101.43 a barrel. Prices climbed after Iran advised Saudi Arabia against replacing Iranian supplies if sanctions are enacted. Inpex climbed 1.8 percent to 517,000 yen, while Japan Petroleum Exploration Co. added 3.3 percent to 3,260 yen.
Makers of factory equipment gained after Japan Machine Tool Builders’ Association said orders for machine tools rose 17.4 percent in December. Credit Suisse AG said the number was “unexpectedly firm.”
Fanuc, Japan’s biggest maker of computers used to run machine automated tools, advanced 4.2 percent. Okuma Corp., which manufactures lathes and grinders, climbed 5.9 percent to 518 yen.
The Topix has risen about 0.9 percent this year, compared with a 2.9 percent gain by the S&P 500 and a 3.6 percent increase by the Stoxx Europe 600 Index. Stocks in Japan’s broadest index are valued at 15.2 times estimated earnings on average, compared with 12.4 times for the S&P 500 and 10.2 times for the Stoxx 600.
Tokyo Electric led gains on the Nikkei 225 after saying it will raise power rates for companies by an average of 17 percent. The utility said the higher rates will be used to cover costs after the Fukushima nuclear disaster forced it to rely on more expensive thermal power. Shares gained 7.8 percent to 221 yen.
--Editors: Jason Clenfield, Sam Waite.
To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net
To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net
