RTRS: Nikkei climbs as auto shares surge on U.S. hopes
Japan's Nikkei average gained 4.1 percent on Thursday as automakers surged on growing optimism about the U.S. economy after a string of better data than expected. Banks such as Mizuho Financial Group gained on short-covering after recent sharp falls, while signs that foreign investors are becoming more active buyers also helped boost overall sentiment.
U.S. auto sales for March met or beat Wall Street's dismal expectations and encouraged hope that the world's largest car market may be nearing bottom.
Market analysts said this combined with a range of factors, including a sense that a "managed" bankruptcy of General Motors has been largely factored in, helped send auto shares surging for the second straight day.
"There's also the hope that while a GM failure would lead to some short-term selling, over the longer term the situation could actually help Japanese carmakers pick up a larger market share," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"Plus GM has been out there as a danger for a long time, yet if you look at the autos subindex it appears to have bottomed out in December."
The New York Times reported on Wednesday that the U.S. government is seeking to ease GM into a "controlled" bankruptcy, but a senior official said the White House remains optimistic that GM can restructure without going to bankruptcy court.
The benchmark Nikkei gained 339.74 points to 8,684.78, while the broader Topix rose 3.9 percent to 824.68.
AUTOS CHARGE AHEAD
"Share prices are looking for a new direction, so they reacted positively to the U.S. sales results," said UBS Securities analyst Tatsuo Yoshida, though he said the year-on-year decline was still staggering and the annualized sales rate extremely low.
Honda Motor Co surged 10.9 percent to 2,745 bringing its gains over the past two days to 18.6 percent, while Toyota Motor Corp rose 6.7 percent for a two-day bounce of 12.2 percent.
Nissan Motor Co soared for the second day in a row, climbing 15.6 percent and extending its total gains to 25.7 percent.
"A number of good signs for the U.S. economy are accumulating. Also, auto shares fell pretty sharply on Tuesday, so there's some short-covering going on as well," Osakabe said. Mizuho climbed 7.9 percent to 207 yen, top lender Mitsubishi UFJ Financial Group rose 5.9 percent to 525 yen, and Sumitomo Mitsui Financial Group gained 7.1 percent to 3,760 yen.
