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Japan’s Nikkei Rises a 6th Day, Led by Glassmakers, Chemicals

Post Time:Jun 03,2009Classify:Industry NewsView:409

June 3 (Bloomberg) -- Japanese stocks edged up, sending the Nikkei 225 Stock Average to its longest winning streak in five months, led by glassmakers on optimism sales of flat-screen materials will recover.

Asahi Glass Co. and Nippon Electric Glass Co. surged more than 5 percent after JPMorgan Chase & Co. rated them “overweight” on expectations sales will rebound. Tosoh Corp. and Mitsui Chemicals Inc. climbed on speculation mergers will increase profitability in the chemical sector. Sumitomo Trust & Banking Co. lost 1.7 percent after share sales by JPMorgan and American Express Co. sent U.S. financial stocks lower.

The Nikkei 225 Stock Average rose 37.36, or 0.4 percent, to close at 9,741.67 in Tokyo, a sixth-straight gain and the longest winning streak since Jan. 7. The broader Topix index added 0.94, or 0.1 percent, to 914.50, with 19 of its 33 industry groups advancing.

“People have factored in the idea that the economy started to recover in the current quarter and are waiting to see whether the bounce will be sustained,” said Hiroshi Morikawa, a senior strategist at MU Investments Co., which manages about $14 billion. “Some shares are rising but overall the market doesn’t have a clear direction.”

The Nikkei has soared 38 percent since hitting a 26-year low on March 10, pacing a global rally on optimism government stimulus packages totaling $2.2 trillion are taking effect. The MSCI World Index has jumped 45 percent since its March low.

Display Panels

Japanese Prime Minister Taro Aso has introduced a record 15.4 trillion yen ($161 billion) spending package to bolster the economy, and Finance Minister Kaoru Yosano said again this week that the nation’s economy probably bottomed last quarter when it shrank a record 15.2 percent.

Asahi Glass Co., the world’s No. 1 maker of glass substrates used for plasma-display panels, jumped 5.4 percent to 768 yen. Nippon Electric Glass Co. surged 8.2 percent to 998 yen. The companies were rated “overweight” in new coverage by JPMorgan analyst Akira Kishimoto, who cited an expected midterm improvement in substrate sales. A gauge of glassmakers was the biggest winner among Topix groups.

Tosoh increased 1 percent to 316 yen, its best close since Sept. 29, while Mitsui Chemicals gained 1.7 percent to 359 yen, its highest close since Dec. 10. The Topix Chemicals Index was the biggest contributor to the broader gauge’s increase.

Rivals Mitsubishi Chemical Holdings Corp., Japan’s largest ethylene producer, and Asahi Kasei Corp. said yesterday they’re considering merging ethylene operations. The announcement lifted shares on speculation mergers could improve the sector’s profitability, said Deutsche Bank AG analyst Takato Watabe.

Resource Shares

Resource-related shares rose even after crude and copper prices slipped. Nippon Mining Holdings Inc., Japan’s largest copper producer, jumped 5.2 percent to 569 yen. Inpex Corp., the country’s No. 1 oil explorer, added 1.4 percent to 788,000 yen.

Copper futures for July delivery dropped 0.9 percent yesterday after prices of the metal surged 9.3 percent in the prior three sessions. Crude for July delivery retreated 3 cents to settle at $68.55 a barrel in New York, following six days of gains.

“Companies that are particularly sensitive to the economic cycle are cheap from a long-term perspective,” said Hiroshi Motoki, managing director at the Japanese unit of AIG Global Investment Corp., which has $688 billion in assets.

Clean Energy

Mitsubishi Heavy Industries Ltd., Japan’s largest maker of heavy equipment, rose 0.8 percent to 363 yen after the company said it expects to boost annual sales from its clean-energy business by about 50 percent to 3 trillion yen ($31 billion) in fiscal 2012.

Banks and insurers were the biggest drags on the Topix index today, following declines in financial shares in the U.S. A measure of U.S. financial stocks lost 1.2 percent, the steepest decline among the 10 industries on the Standard & Poor’s 500 Index, after JPMorgan sold $5 billion in stock and American Express sold $500 million.

Sumitomo Trust lost 1.7 percent to 474 yen, while Aozora Bank Ltd. sank 4 percent to 144 yen. Mitsubishi UFJ Financial Group Inc., Japan’s biggest listed bank, fell 1.1 percent to 614 percent. Mizuho Financial Group Inc., the country’s No. 2 lender, dropped 1.3 percent.

Source: Bloomberg.comAuthor: shangyi

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