Nikkei snaps 5-day losing streak on robust US earnings
Sunday, 25 July 2010
TOKYO, July 24 (Xinhua): Tokyo stocks advanced Friday, with the Nikkei stock index snapping a five-day losing streak as Wall Street rose overnight on upbeat earnings reports and investor's were confident the results of Europe's eagerly awaited stress tests for European banks would be positive.
The 225-issue Nikkei Stock Average finished 210.08 points, or 2.28 per cent, higher from Thursday at 9,430.96, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 15.81 points, or 1.92 per cent, at 841.29.
Robust earnings reports from US firms like Caterpillar Inc lifted the market mood on the last trading day of the week and coupled with US existing home sales data for June coming in better-than-expected, investors bought back issues oversold in the last few days, brokers said.
"Company earnings aren't bad in the US as well as in Japan," said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. "Investors will focus on the favourable fundamentals and buy shares as they have been too pessimistic."
Analyst added that a weaker yen also spurred buying of export and tech-related issues and reports that Europe's manufacturing and services industry unexpectedly accelerating in July was also a catalyst to buy.
Additionally, some brokers noted that investors' stances have been overly pessimistic recently.
"Recent stock falls came as a result of excessive pessimism... and I don't think the market will suddenly turn optimistic" after the stress tests results,
"Speculation is that the results will probably not come out with negative surprises and the market might have already priced that in to a large degree."
The yen depreciated to lows of 112.67 against the euro and 87.24 against the dollar to the delight of Japanese firms reliant on profits made abroad as yields aren't diminished when repatriated.
Subsequently, chip equipment maker Tokyo Electron gained 3.1 per cent to 4,670 yen and stepper maker Nikon Corp climbed 2.7 per cent to 1,502 yen. Nissan gained nearly three per cent to 625 yen and Sony surged five per cent to 2,513 yen.
The 225-issue Nikkei Stock Average finished 210.08 points, or 2.28 per cent, higher from Thursday at 9,430.96, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 15.81 points, or 1.92 per cent, at 841.29.
Robust earnings reports from US firms like Caterpillar Inc lifted the market mood on the last trading day of the week and coupled with US existing home sales data for June coming in better-than-expected, investors bought back issues oversold in the last few days, brokers said.
"Company earnings aren't bad in the US as well as in Japan," said Juichi Wako, a senior strategist at Tokyo-based Nomura Holdings Inc. "Investors will focus on the favourable fundamentals and buy shares as they have been too pessimistic."
Analyst added that a weaker yen also spurred buying of export and tech-related issues and reports that Europe's manufacturing and services industry unexpectedly accelerating in July was also a catalyst to buy.
Additionally, some brokers noted that investors' stances have been overly pessimistic recently.
"Recent stock falls came as a result of excessive pessimism... and I don't think the market will suddenly turn optimistic" after the stress tests results,
"Speculation is that the results will probably not come out with negative surprises and the market might have already priced that in to a large degree."
The yen depreciated to lows of 112.67 against the euro and 87.24 against the dollar to the delight of Japanese firms reliant on profits made abroad as yields aren't diminished when repatriated.
Subsequently, chip equipment maker Tokyo Electron gained 3.1 per cent to 4,670 yen and stepper maker Nikon Corp climbed 2.7 per cent to 1,502 yen. Nissan gained nearly three per cent to 625 yen and Sony surged five per cent to 2,513 yen.