Bloomberg News

Japanese Stocks Advance as Greek Vote Outweighs Shrinking GDP

February 13, 2012

Feb. 13 (Bloomberg) -- Japanese stocks climbed as the Greek parliament approved austerity measures needed to secure a debt bailout, outweighing a report that Japan’s economy contracted more than expected.

Nippon Sheet Glass Co., a glassmaker that counts Europe as its biggest market, rose 1.5 percent. Fanuc Corp. advanced 2.2 percent after a report the industrial robotics company plans to double production of tools used to make smartphone components. Dai Nippon Printing Co. sank 3.9 percent after the provider of printing services cut its full-year forecast.

“The focus is on what’s happening in Europe and on other overseas developments,” said Toshiyuki Kanayama, a market analyst at online brokerage Monex Group Inc. in Tokyo. For Japan, “Investors have been expecting a negative GDP number. In addition to the fact that Europe and developing economies are slowing and you had the Thai floods, there’s also a retracement from high growth in the previous quarter.”

The Nikkei 225 Stock Average rose 0.6 percent to 8,999.18 at the close, with about two shares rising for each that fell. The broader Topix Index gained 0.3 percent to 781.68, after earlier retreating as much as 0.2 percent.

Futures on the Standard & Poor’s 500 Index increased 0.4 percent today. The gauge slipped 0.7 percent on Feb. 10 amid concern plans to help Greece avoid default were unraveling and as American consumer sentiment dropped more than forecast.

Greece Austerity

Companies that receive revenue from Europe gained after Greek Prime Minister Lucas Papademos won parliamentary approval for austerity cuts to secure an international bailout. Rioters protesting the plan battled police and set fire to buildings in downtown Athens.

Nippon Sheet Glass added 1.5 percent to 135 yen. Mazda Motor Corp., a carmaker that gets about 18 percent of sales from Europe, gained 1.4 percent to 147 yen.

Japanese stocks advanced even as government data showed the nation’s economy shrank an annualized 2.3 percent in the fourth quarter as exports slid. That compared with a 1.3 percent decline estimated in a Bloomberg News survey of 26 economists.

“Japan’s economy will likely remain vulnerable to a slowdown in global demand and the yen’s appreciation,” Kiich Murashima, chief economist at Citigroup Global Markets Japan Inc. in Tokyo, said before the report was released.

Fanuc advanced 2.2 percent to 13,210 yen. The company plans to build a factory in Japan to build controls used to make smartphone components as demand surges the Nikkei newspaper reported, without citing anybody.

Tokyo Electric

Tokyo Electric Power Co. gained 0.5 percent to 201 yen after swinging between gains of as much as 8 percent and losses of as much as 3 percent. The government approved the release of 689.4 billion yen ($8.9 billion) of aid to the owner of the crippled Fukushima nuclear plant, averting the risk of having the stock delisted from the Tokyo Stock Exchange.

Tepco, as the utility is known, will later today report earnings for the nine months ended Dec. 31. The company said in November it expects a loss of 600 billion yen for the year ending March 31, bringing losses from the crisis to 1.85 trillion yen.

Among stocks that declined, Dai Nippon Printing sank 3.9 percent to 781 yen. The company said it cut its full-year net- income forecast by 58 percent to 8 billion yen, as sales of its films were hurt by slumping demand for liquid-crystal displays.

Topix Rally

The Topix has rallied 6.9 percent since the beginning of the year through Feb. 10 amid optimism the U.S. economy is weathering the European debt crisis and central banks will relax monetary policy to spur growth. Of the 1,439 companies in the index that have reported earnings since Jan. 9, 254 missed analyst estimates, while 131 exceeded expectations, according to data compiled by Bloomberg.

Sumitomo Mitsui Construction Co. plunged 19 percent to 86 yen, the steepest drop since November 2000. The contractor said nine-month net income slumped 79 percent to 252 million yen, citing higher crude oil prices and the yen’s appreciation. The builder also said its top shareholder, Daiwa Securities SMBC Principal Investments Co., plans to sell all 68.1 million shares it holds in the company.

Skymark Airlines Inc. slid 9.2 percent to 670 yen after Japan’s largest budget carrier cut its full-year net-income forecast by 13 percent to 7.7 billion yen, citing rising fuel prices and intensifying competition in the industry.

The Nikkei 225 Volatility Index increased 0.7 percent to 21.36, indicating traders expect a swing of about 6.1 percent on the benchmark gauge over the next 30 days.

--Editor: Jason Clenfield

To contact the reporters on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Satoshi Kawano in Tokyo at skawano1@bloomberg.net

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


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