Barefoot Investor: Japanese Stocks Rise Toward Highest Close in 2 Weeks on European Optimism

apanese stocks rose, with the Nikkei 225 Stock Average paring its biggest monthly loss since August, as shipping companies and steelmakers rebounded.

Kawasaki Kisen Kaisha Ltd. (9107) and other shipping lines advanced, rising for a third day after the sector plunged by as much as 25 percent this month. JFE Holdings Inc. (5411) and Kobe Steel Ltd. (5406) both rebounded for a third day. Nikon Corp., a camera maker that depends on Europe for about a quarter of its sales, gained 1.5 percent on optimism the leaders in the region will boost efforts to end the debt crisis.

“Investors are likely to buy shares even on small news because stocks (TPX) have been sold too much globally on lingering debt issues in European countries,” said Seiichiro Iwamoto, who helps oversee about $35 billion in Tokyo at Mizuho Asset Management Co. “People in the market are swinging between joy and sorrow on even the smallest news from the region.”

The Nikkei 225 (NKY) gained 1.1 percent to 8,377.74 as of 12:36 a.m. in Tokyo. For the month, the gauge has lost 6.8 percent amid signs Europe’s crisis is spreading to the region’s major economies. The broader Topix gained 0.8 percent to 721.72 today.

The Standard & Poor’s 500 Index (SPXL1) gained 2.9 percent yesterday in New York after Thanksgiving retail sales climbed to a record amid speculation European leaders will do more to tame the debt crisis. U.S. retail sales during the holiday weekend increased 16 percent to $52.4 billion, the National Retail Federation said on Nov. 27, citing a BIGresearch survey.
Shippers, Steelmakers

Shipping lines and steelmakers gained the most among the 33 Topix industries groups today, rebounding after the sectors plunged by at least 35 percent this year.

Kawasaki Kisen, which sank by more than 60 percent this year, gained 4.6 percent to 136 yen. Shares gained even after the Nikkei newspaper reported the shipping line will likely post a net loss of 32 billion yen ($409 million) this fiscal year on sluggish demand from the U.S. and Europe.

Mitsui O.S.K. Lines Ltd., the nation’s No. 2 shipping line by revenue, rose 2.9 percent to 247 yen. The shares have fallen by about half this year.

JFE Holdings advanced 4.2 percent to 1,381 yen. Kobe Steel climbed 1.8 percent to 116 yen. The companies have dropped more than 40 percent this year.

Japanese stocks gained even after the jobless rate rose for the first time in three months, adding to evidence that the nation’s post-earthquake rebound is fading. The unemployment rate increased to 4.5 percent in October.
Exporters to Europe

Japanese exporters to Europe advanced today. Nikon gained 1.5 percent to 1,770 yen. Ricoh Co., a maker of cameras and office-equipment that depends on the region for more than 20 percent of its sales, rose 2 percent to 680 yen.

In Europe, German newspaper Welt am Sonntag reported German Chancellor Angela Merkel and French President Nicolas Sarkozy are discussing an agreement under which member states will commit to tighter budget discipline without waiting for treaty changes. The newspaper did not say where it got the information.

“There are increasing expectations that some additional support for the European debt crisis will come out at the European summit meeting next month,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co. “The expectations won’t last long and the markets will likely react nervously to European news.” (Bloomberg)


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