Bloomberg News

Topix Reaches Five-Month High as Japan Tobacco, Shippers Advance

February 07, 2012

Feb. 7 (Bloomberg) --?the Topix Index reached a five-month high after Japan Tobacco Inc. raised its forecast and shipping lines climbed as cargo rates rebounded. Gains were limited as Greece struggled to secure a bailout.

Japan Tobacco, the world’s second-largest listed cigarette maker, rose 5.5 percent as sales recovered faster than expected after the March earthquake. Kawasaki Kisen Kaisha Ltd., Japan’s third-largest shipper by market value, advanced 1.3 percent. Canon Inc., a camera maker that gets 31 percent of its sales in Europe, fell 0.2 percent.

The Topix rose 0.4 percent to 772.77 as of the 3 p.m. close of trading in Tokyo, its highest since Sept. 1. The benchmark Nikkei 225 Stock Average fell 0.1 percent to 8,917.52, retreating from a three-month high.

“Investors like the fact there haven’t been any surprises in earnings data,” said Hitoshi Asaoka, a Tokyo-based senior strategist at Mizuho Trust & Banking Co. “Both negative and positive reports about earnings fell within expectations, which is boosting confidence in the market.”

Futures on the Standard & Poor’s 500 Index were little changed today. The gauge was little changed in New York yesterday as European leaders stepped up pressure on Greek politicians to accept additional austerity cuts needed to secure a 130 billion-euro ($170 billion) bailout, saying time was running out.

Greek Stalemate

Greek interim Prime Minister Lucas Papademos plans to confer with international lenders. A gathering of Greece’s political leaders was delayed by a day until today as they struggled for a unified response.

“The market is nervous about the outcome of negotiations over Greece’s debt haircut,” said Fumiyuki Nakanishi, a strategist at SMBC Friend Securities Co. in Tokyo.

Canon slid 0.2 percent to 3,395 yen. Nippon Sheet Glass Co., which gets nearly 40 percent of its sales in Europe, fell 2.3 percent to 128 yen.

Among stocks that advanced, Japan Tobacco gained 5.5 percent to 406,500 yen after it said full-year revenue would rise 4.4 percent to 2.54 trillion yen ($33 billion).

Earnings Season

Of 1,002 companies listed on the Topix that have reported earnings since Jan. 9, 204 have missed analysts’ estimates while 94 beat expectations, according to data compiled by Bloomberg.

Dainippon Screen Manufacturing Co. lead declines on the Nikkei. The maker of chip equipment sank 7.1 percent to 587 yen after cutting its full-year net income forecast 35 percent to 6.5 billion yen, citing drops in the value of fixed assets and investment securities.

Shipping companies gained after the Baltic Dry Index, a gauge of cargo rates, rose 0.2 percent yesterday, its first advance since Dec. 12. Kawasaki Kisen climbed 1.3 percent to 157 yen. Nippon Yusen K.K., Japan’s top shipping line by sales, rose 2.4 percent to 218 yen. Mitsui O.S.K. Lines Ltd. gained 2.2 percent to 329 yen.

The Topix has added 6.1 percent this year after plunging 19 percent last year on optimism U.S. economy is recovering and China may ease its monetary policy further to spur growth. That’s pushed the price of companies on the measure to 0.93 times estimated book value, up from 0.85 in November, according to data compiled by Bloomberg. A number below one means investors can buy companies for less than the value of their assets.

The Nikkei 225 Volatility Index fell 2.1 percent to 20.52, indicating traders expect a swing of about 6 percent on the benchmark gauge over the next 30 days.

--With assistance from Toshiro Hasegawa in Tokyo. Editors: Jim Powell, Jason Clenfield.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.


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