BLBG:Japan Stocks Gain as Brokerages, Oil Companies Rise on Economic Confidence
Japanese stocks climbed, lifting the Nikkei 225 Stock Average to its highest level in a month, as brokerages advanced and energy companies rose amid signs the global economy is recovering in the face of Europe’s debt crisis.
Nomura Holdings Inc. paced gains among brokerages, which rose the most among the 33 industry groups on the Topix (TPX) Index. Inpex Corp. (1605), Japan’s top oil explorer, added 3 percent after crude prices gained for a second day. Fanuc Corp. (6954) a maker of factory automation equipment, climbed 4.3 percent after orders for Japanese machine tools increased. Tokyo Electric Power Co. jumped after raising electricity rates.
The Nikkei 225 advanced 1.3 percent to 8,575.96 as of 1:42 p.m. in Tokyo, after swinging between gains and losses during the morning trading session. The broader Topix added 1 percent to 738.82. Shares were buoyed by reports yesterday that U.S. manufacturing is expanding, while German investor confidence beat forecasts.
“Concern about a slowdown in the global economy is receding,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.
Futures on the Standard & Poor’s 500 Index rose 0.2 today even after Fitch Ratings Managing Director Edward Parker said Greece is insolvent and probably won’t be able to honor a bond payment in March as the country negotiates with creditors to cut its debt burden.
‘Default Priced-In’
“The market has already priced-in a Greek default,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at Tokyo-based T&D Asset Management Co. “The concern is that there will be a domino effect across the whole region.”
Japanese shares advanced after manufacturing in the New York region expanded in January at the fastest pace in nine months and confidence among German investors rose more than analysts estimated.
Energy companies gained after crude oil for February delivery rose for a second day in New York to as high as $101.33 a barrel. Prices climbed after Iran advised Saudi Arabia against replacing Iranian supplies if sanctions are enacted.
Makers of factory equipment gained after Japan Machine Tool Builders’ Association said orders for machine tools rose 17.4 percent in December. Credit Suisse AG said the number was “unexpectedly firm.”
The Topix (TPX) has risen about 1.4 percent this year, compared with a 2.9 percent gain by the S&P 500 and a 3.6 percent increase by the Stoxx Europe 600 Index. Stocks in Japan’s broadest index are valued at 15.2 times estimated earnings on average, compared with 12.4 times for the S&P 500 and 10.2 times for the Stoxx 600.
Tokyo Electric led gains on the Nikkei 225 (NKY) after saying it will raise power rates for companies by an average of 17 percent. The utility said the higher rates will be used to cover costs after the Fukushima nuclear disaster forced it to rely on more expensive thermal power. Shares gained 10 percent to 225 yen.
To contact the reporters on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net
To contact the editor responsible for this story: John McCluskey at j.mccluskey@bloomberg.net
