A bit of hope in Tokyo.... or Abbey goes Sushi over Nikkei
Saturday December 2 9:25 PM ET
Tokyo Stocks Seen Headed for Recovery
By Ritsuko Ando
TOKYO (Reuters) - Tokyo stocks are expected to chalk up gains this week,
supported by fresh buying from newly launched investment trusts and a
growing consensus the market is oversold.
``The market is showing more signs of a recovery, with higher turnover and
healthy gains in a broad range of issues,'' said Hiroshi Sato, head of equities
products at Cosmo Securities.
But traders said concerns over volatility in the U.S. Nasdaq market would
likely limit any significant gains, keeping the Nikkei trading in a range of
14,500 to 15,500.
The average closed on Friday at 14,835.33, up 3.63 percent for the week
and above its 25-day moving average for the first time in more than three
weeks -- a sign the market may be shifting into a recovery mode.
Another encouraging sign was a surge in trading volume, which topped one
billion shares on Friday for the first time in five months, nearly twice the
amount traded in recent days.
``We're seeing more volume returning to the market, despite a shaky outlook
in technology stocks, and investment trusts seem to be playing a major part in
that,'' said Hirokazu Kabeya, market analyst at the Daiwa Institute of
Research.
Traders said these funds, bolstered by individual investors who have just
received their winter bonuses, would likely buy into a broad range of sectors
including retail, autos and high-tech issues, which have suffered hefty losses in
recent weeks.
Chip-related issues such as Advantest Corp and Tokyo Electron Ltd may be
weighed down by concerns over slower demand in the U.S., but chipmakers
manufacturing a wider range of electronic goods, such as Fujitsu Ltd and
NEC Corp could still rebound, traders said.
Fujitsu and NEC have both fallen about 60 percent from their highs earlier
this year.
Some traders warned against being optimistic, saying Tokyo's market will
remain vulnerable to moves in the Nasdaq.
Eye On Foreign Investors
The U.S. Nasdaq composite index rose 1.82 percent to 2,645.29 on Friday,
but that was just a day after it fell to its lowest level since August 1999,
ending November with its worst monthly performance in 13 years.
A weaker Nasdaq often prompts U.S. investors to unload their Japanese
shareholdings to cover for losses at home.
Tokyo investors also fear a downturn in the U.S. technology market signals
what may be around the corner for Japan.
``I would be careful, because a solid recovery really depends on sustained
buying from U.S. investors, whose participation depends on Nasdaq,''
Haruki Takahashi, head of equities dealing at Tsubasa Securities, said.
``I don't see any harm in staying on the sidelines for a bit.''
Most market players said they expect little market moving news from Japan's
July-September gross domestic product (GDP) figures, due to be announced
just before the market opens on Monday.
A Reuters poll of 22 economists produced a median forecast of a 0.2
percent growth from the previous quarter, showing steady but slower
economic growth.
Diary:
Monday, Dec 4
-- Economic Planning Agency to release gross domestic product data for
July-September.
Tuesday, Dec 5
-- Shinsei Bank to announce its half-year earnings. Shinsei Bank was created
earlier this year when the failed and nationalized Long-Term Credit Bank of
Japan was taken over by a consortium led by U.S. investment group
Ripplewood Holdings.
Friday, Dec 8
-- V Technology Co Ltd, manufacturer of testing devices for liquid crystal
displays, to list on the Tokyo Stock Exchange's Mothers market for growth
stocks. |
