Japan goes Zoom ! Major breakout - bank stocks up 10% !
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Japanese Stocks Rally, Led by Mizuho; Nikkei Rises Above 9500
July 2 (Bloomberg) -- Japanese stocks rallied, driving the Nikkei 225 Stock Average above 9500 for the first time in nine months. Banks such as Mizuho Financial Group Inc. surged on optimism an improvement in business sentiment and gains on stock investments will help them return to profit.
The nation's largest stocks such as NTT DoCoMo Inc. and TDK Corp. also advanced on speculation domestic investors are joining an overseas-led rally, spurred by a central bank survey yesterday showing large manufacturers unexpectedly became less pessimistic.
``The economy is showing some signs of recovery,'' said Norihito Kanai, who helps manage the equivalent of $2.5 billion at Meiji Dresdner Asset Management Co. ``With the stock markets rallying, Japanese investors are prompted to jump in as well.'' Kanai holds shares of Canon Inc.
The Nikkei surged 307.80, or 3.3 percent to 9586.29 as of 1:43 a.m. in Tokyo. The average rose above 9500 for the first time since Sept. 27 and is poised for its biggest gain since Nov. 28. The Topix jumped 27.76, or 3 percent to 944.02.
Mizuho surged 19 percent with banks three of the five most active stocks by value on the Tokyo Stock Exchange's first section. Benchmarks climbed to nine-month highs yesterday.
Nikkei futures for September delivery rose 3.1 percent to 9570 in Osaka and added 3.1 percent to 9570 in Singapore. In orders placed before the market opened, overseas investors bought 11.1 million more shares than they sold through 11 brokerages.
That's the 15th time in 16 days that investors from outside of Japan have been raising their stakes in Japanese equities.
Banks Surge
Banks jumped on optimism the Nikkei's best quarter in four years will enable them to record gains on stakes they own in other companies, some investors said.
Mizuho, Japan's largest lender by assets, surged 20,000 yen, or 19 percent, to 123,000. UFJ Holdings Inc., Japan's fourth- largest bank, climbed 30,000 yen, or 15 percent, to 225,000. Shares of both companies have more than doubled since the Nikkei slumped to a 20-year low two months ago.
``For banks, the higher the Nikkei goes, the better their balance sheets look,'' said Marc Desmidt, who helps manage the equivalent of $8.4 billion as head of investment at Merrill Lynch Investment Managers Co. in Tokyo, including bank shares.
The nation's seven largest have unrealized gains of more than 1 trillion yen, helped by the Nikkei's 18 percent gain this year, according Daiwa Institute of Research estimates. Last fiscal year, lenders had a combined $27 billion loss on shares they held in other companies, which eroded their capital.
The banks forecast a return to profit this year that was partly dependent on a recovery in the domestic economy, which a central bank survey of business sentiment showed yesterday.
The Bank of Japan's quarterly Tankan survey of business confidence yesterday rose to minus 5 in June from minus 10 three months earlier. A negative reading means that pessimists outnumbered optimists.
`Optimistic'
Japan's biggest stocks rose as local investors joined their overseas counterparts, some traders said. Individual and institutional investors in Japan had been net sellers of equities even as the Nikkei surged 14 percent in the second quarter.
``We're beginning to see domestic investors becoming more optimistic about a stock market that's been driven primarily by foreign investors'' because of optimism over the economy, said Minoru Tada, a director at World Nichiei Securities Co. ``We're seeing individual investors come back and fund managers are likely to follow.''
DoCoMo, the nation's largest company by market value, rose 10,000 yen, or 3.9 percent, to 270,000. TDK Corp., the second- biggest constituent on the Nikkei, added 270 yen, or 4.3 percent, to 6,620. Twenty seven of the country's 30 biggest stocks by market value advanced, pushing the Topix Core 30 Index, which tracks their performance, up 2.2 percent.
NEC, Tokyo Electron
Computer-related stocks were among the biggest contributors to gains on the Nikkei and Topix. NEC Corp., the world's sixth- largest chipmaker, jumped 35 yen, or 5.3 percent, to 696.
Tokyo Electron Ltd., the world's second-largest maker of computer chip-production equipment, added 320 yen, or 5.5 percent, to 6,1650. NTT Data Corp., Japan's largest computer systems integrator added 37,000 yen, or 9.6 percent, to 423,000.
``This bullish sentiment is very strong, and it will last for a while,'' said Koshi Kumagai, who helps manage about $2.5 billion as a fund manager at HSBC Asset Management Japan. ``Many investors with money were looking for a reason to buy.''
Last Updated: July 2, 2003 00:50 EDT |
