Nikkei Jumps to 2-Week High As War Begins
27 minutes ago
story.news.yahoo.com
By Nathan Layne
TOKYO (Reuters) - Japanese stocks jumped more than two percent and hit a two-week high by midsession on Thursday, with Nomura Holdings and other blue chips snapped up on hopes for a swift end to a war in Iraq (news - web sites) that has begun.
The Nikkei average was up 2.18 percent or 175.26 points at 8,226.30 after rising nearly three percent at one point to a two-week high of 8,287.09. The broader TOPIX index of all first section issues rose 2.18 percent to 806.28.
After the close of the morning session, White House spokesman Ari Fleischer (news - web sites) said the opening stages of the disarmament of Iraqi had begun and that President Bush (news - web sites) would give a televised address at 0315 GMT.
"The market has been expecting the attack to begin today so this is no surprise at all. Stocks have already risen this morning on hopes for a short war," said Tsuyoshi Segawa, equity strategist at Shinko Securities.
"I expect little reaction one way or the other this afternoon. The market is also keen to see how Wall Street reacts," he said.
Before Washington announced that war had commenced, top brokerage house Nomura Holdings rose 3.62 percent to 1,346 yen and dominant mobile phone operator NTT DoCoMo Inc tacked on 4.09 percent to 229,000 yen.
Honda Motor Co Ltd., Japan's second-largest automaker and a major exporter, put on 3.16 percent to 4,240 yen following the dollar's rise to a one-month high of 120.65 yen in New York. The dollar was currently fetching about 120.0 yen.
"Japanese stocks have recently been lagging behind global markets, so part of today's rally is just us playing catch up," said Yorinobu Hara, general manager at Resona Asset Management.
"But if you believe that the U.S. economy will come out of this conflict stronger, then exporter stocks are attractive, especially since selling pressure from corporate pension funds and other institutions have knocked them down so far."
In 1991, the Nikkei surged 17 percent in a six-week "relief rally" that began after the onset of the U.S.-led military campaign in Iraq. The U.S. Standard & Poor's 500 Index gained 18 percent in the same period.
Volume picked up a notch, with 400.69 million shares changing hands on the first section of the Tokyo Stock Exchange, compared to 321 million shares on Wednesday morning. Gainers outnumbered decliners 1,274 to 138 on the main board. |
