Nikkei inches up, supported by earnings, eyes on G20
Sunday, 24 October 2010
TOKYO, Oct 23 (Reuters): Japan's Nikkei rose 0.5 per cent Friday in a rebound after two days of losses, but investors were wary of pushing the market higher before seeing the outcome of a Group of Twenty (G20) meeting and with the yen hovering near a 15-year high on the dollar.
But with the earnings season heading into full swing in Japan, investors snapped up shares of companies that had upbeat earnings prospects, such as Hitachi Ltd, helping provide support to the overall market.
G20 finance officials started their formal meetings Friday with nations from the developing world and Japan dismissing US proposals to set limits on current account balances in an effort to defuse tensions over currencies.
"As more earnings start to come out, investors have enough trading factors for individual companies and that's become the main driver in the market," said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute.
"But Japanese stocks as a whole haven't found a clear direction ahead of a series of important events such as the G20 and the Federal Reserve's policy meeting. If these events end up driving the dollar to become even weaker, that would be negative for stocks."
In light trade, the benchmark Nikkei ended the day up 50.23 points at 9,426.71, after marking its lowest close in three weeks Thursday.
The index shed 0.8 per cent on the week, weighed down by a fall of nearly 2 per cent last Wednesday after China unexpectedly tightened credit.
But the Nikkei managed to end the week above its 13-week moving average, now at 9,383, which has served as support since September.
Resistance looms at its 26-week moving average, now at 9,630, which has held down the Nikkei for about five months.
The broader Topix advanced 0.6 per cent to 824.88.
The yen edged up to 81.12 against the dollar, still near a 15-year high of 80.84 hit on EBS last Wednesday.
Trade was light on the Tokyo exchange's first section, with 1.49 billion shares changing hands, near its lowest volume since late September that it hit last Monday.
Advancing stocks outnumbered decliners by more than 2 to 1.
After the close, tyre maker Bridgestone Corp said it is targeting an operating profit of 280 billion yen ($3.44 billion) in 2012, up 8 per cent from 157 billion yen forecast for this year, by expanding sales globally and cutting costs.
The stock ended the day up 1.9 per cent at 1,455 yen.
Hitachi Ltd jumped 2.9 per cent to 357 yen after the Nikkei business daily said that Japan's biggest electronics conglomerate was set to report an operating profit for April-September of more than 200 billion yen, beating its forecast of 170 billion yen.
Hitachi's earnings were supported by strong economic growth in emerging markets, resulting in higher demand for items such as digital consumer electronics, the paper said.
Heavy machinery and engineering firm Hitachi Zosen climbed 3.5 per cent to 118 yen after the company raised its April-September net profit outlook to 5.6 billion yen from 3 billion yen previously.
Mitsubishi Steel soared 10.9 per cent to 183 yen after the company raised its full-year earnings forecasts to March, citing a solid recovery in demand by the construction machinery and auto industries.
But with the earnings season heading into full swing in Japan, investors snapped up shares of companies that had upbeat earnings prospects, such as Hitachi Ltd, helping provide support to the overall market.
G20 finance officials started their formal meetings Friday with nations from the developing world and Japan dismissing US proposals to set limits on current account balances in an effort to defuse tensions over currencies.
"As more earnings start to come out, investors have enough trading factors for individual companies and that's become the main driver in the market," said Yoshikiyo Shimamine, chief economist at Dai-ichi Life Research Institute.
"But Japanese stocks as a whole haven't found a clear direction ahead of a series of important events such as the G20 and the Federal Reserve's policy meeting. If these events end up driving the dollar to become even weaker, that would be negative for stocks."
In light trade, the benchmark Nikkei ended the day up 50.23 points at 9,426.71, after marking its lowest close in three weeks Thursday.
The index shed 0.8 per cent on the week, weighed down by a fall of nearly 2 per cent last Wednesday after China unexpectedly tightened credit.
But the Nikkei managed to end the week above its 13-week moving average, now at 9,383, which has served as support since September.
Resistance looms at its 26-week moving average, now at 9,630, which has held down the Nikkei for about five months.
The broader Topix advanced 0.6 per cent to 824.88.
The yen edged up to 81.12 against the dollar, still near a 15-year high of 80.84 hit on EBS last Wednesday.
Trade was light on the Tokyo exchange's first section, with 1.49 billion shares changing hands, near its lowest volume since late September that it hit last Monday.
Advancing stocks outnumbered decliners by more than 2 to 1.
After the close, tyre maker Bridgestone Corp said it is targeting an operating profit of 280 billion yen ($3.44 billion) in 2012, up 8 per cent from 157 billion yen forecast for this year, by expanding sales globally and cutting costs.
The stock ended the day up 1.9 per cent at 1,455 yen.
Hitachi Ltd jumped 2.9 per cent to 357 yen after the Nikkei business daily said that Japan's biggest electronics conglomerate was set to report an operating profit for April-September of more than 200 billion yen, beating its forecast of 170 billion yen.
Hitachi's earnings were supported by strong economic growth in emerging markets, resulting in higher demand for items such as digital consumer electronics, the paper said.
Heavy machinery and engineering firm Hitachi Zosen climbed 3.5 per cent to 118 yen after the company raised its April-September net profit outlook to 5.6 billion yen from 3 billion yen previously.
Mitsubishi Steel soared 10.9 per cent to 183 yen after the company raised its full-year earnings forecasts to March, citing a solid recovery in demand by the construction machinery and auto industries.