Japan's Nikkei share average wrestled back almost 1 percent on Thursday, lifting off a
seven-week low as investors picked up stocks on better-than-expected earnings, but the rebound was seen as limited because of concerns over global demand.
Short-covering lent temporary support for battered stocks,while strong earnings for a few U.S. firms boosted Japanese companies in the same sectors.
But Canon, which has a large proportion of its sales in Europe, plummeted as much as 13.8 percent during the session, highlighting nerves about exposure to an unstable euro zone.
"I think the market has entered a downward spiral- it's three steps back and one step forward," said Yuuki Sakurai, CEO of Fukoku Capital Management. "There's no real problem with Canon the company itself, it's down to the extremely negative
market atmosphere at the moment."
The Nikkei gained 0.9 percent to close at 8,443.10 after slumping to just 0.8 percent above its year-to-date low of 8,295.63 on Wednesday.
Hitachi Construction Machinery Co Ltd, which had been hit by worries of a slowdown in China, gained 6.2 percent after it cut its annual profit outlook less than analysts have expected. It was helped by U.S. rival Caterpillar boosting its outlook, while competitor Komatsu Ltd rose 4.5 percent.
Robot maker Fanuc gained 5.3 percent after it maintained its half-year profit outlook on Wednesday.
TDK Corp advanced 3 percent after U.S. hard drive maker Western Digital Corp's earnings beat market expectations on record sales, assuaging fears of a slowdown in
the market.
TDK's exposure to the European market, hit by dwindling demand and a weak euro, has left it 11.9 percent down this month.
After one indebted Spanish region asked Madrid for aid last week and others seemed set to follow, fears that the euro zone's fiscal problems could yet deepen have dampened share prices of companies reliant on the region for sales.
Canon was one such stock, closing 7.8 percent down at a 40-month low after trimming its group net profit forecast by 14 percent to 250 billion yen ($3.2 billion), citing a slowdown in the global economy and the persistent strength in the yen.
"The yen isn't showing any signs of weakening and could get even stronger, which would mean the blue-chips that fought back today would slump again," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities.
Many blamed the yen's gain -- about two percent versus the dollar and more than six percent against the euro -- as a major factor for the Nikkei's poor performance.
So far this month, the Nikkei is down 6.3 percent, underperforming most other markets except for southern European countries. Ex-Japan Asian-Pacific shares were down 1.2 percent in the same period.
The broader Topix index clawed back 1.2 percent to 714.91, although the gain came after it had fallen for 13 of the past 14 sessions.
OVERSOLD?
The market is likely to be oversold in the near-term, some market players say, after the ratio of short-selling rose to one of its highest levels in years, striking a 13-month high of 32.7 percent on Monday before dropping slightly to 31.9 percent on Wednesday.
"When we've had such a high level of short-selling in the past, the market usually rises within 20 business days, as short-sellers have to close their positions," said Jun Yunoki,strategist at Nomura Securities.
Among the battered shares that benefited from some short-covering was Panasonic Corp, with a gain of 2.7 percent on the day against a 23 percent loss on the month, and Sony Corp which recovered 4.9 percent after dropping 18.7 percent since June.
Elsewhere, Olympus jumped 9.6 percent after medical device maker Terumo said on Thursday it is proposing to invest 50 billion yen ($640 million) in Olympus and form a joint holding company.
Shares of Terumo, which is now competing with Sony in seeking a tie-up with Olympus, fell 0.8 percent.
Nomura Holdings was also lifted 5.7 percent on a report that its CEO would resign to take responsibility for the leaks on share offerings from within the company's brokerage unit.(Reuters)
Japan's Nikkei share average slipped for a second day on Tuesday as investors bagged profits on blue chip stocks following February's 10.5 percent rally, although some attractive valuations and a softer yen supported sentiment. The benchmark Nikkei closed 0.6 percent lower at 9,637.63 after losing 0.8 percent on Monday. Mid-last week, the index touched a 7-month high of 9,866.41.
March, the final month of Japan's fiscal year, tends to be the strongest month for the Nikkei, with an average monthly rise of 1.43 percent for the index between 1972 and 2011. Reflecting that, the Nikkei volatility index, a fear gauge, fell 2.8 percent on Tuesday. The lower the volatility index, the higher the risk appetite.
China-related shares extended losses for a second session, with the Nikkei China 50 index down 1.4 percent after the world's second-largest economy cut its 2012 growth target to an 8-year low of 7.5 percent, as Beijing looks to reduce its reliance on external spending and foreign capital.
Among China-related shares, construction machinery maker Komatsu Ltd slid 2.3 percent and industrial robot maker Fanuc Ltd shed 2.5 percent.
The Nikkei has risen 14 percent so far this year, boosted by a run of U.S. economic data suggesting a robust recovery and accommodative policies by global central banks that have pushed investors back into risk assets.
Market participants said that domestic institutional investors' selling had capped recent gains.(Reuters)
Japanese stocks gained, with the Nikkei 225 (NKY) Stock Average rebounding from its lowest level since April 2009, on expectation European leaders will act to prevent the region’s sovereign-debt crisis from getting worse.
Sumitomo Mitsui Financial Group Inc. (8316) advanced 2.8 percent after European and U.S. lenders surged yesterday following a report that the European Central Bank may resume buying some loan-backed bonds. Canon Inc. (7751), a camera maker that depends on Europe for about a third of its sales, climbed 2.4 percent. Sumitomo Metal Mining Co., Japan’s second-largest copper smelter, jumped 3.3 percent after prices for the metal rose.
“Market psychology got a little boost on speculation the ECB will take some action,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. in Tokyo. “Still, it’s too early to say the market has hit bottom.”
The Nikkei 225 rose 1.9 percent to 8,535.97 as of 12:31 p.m. in Tokyo. The broader Topix gained 1.8 percent to 741.64, with almost 10 times as many shares rising as falling. The gauge fell 19 percent this year through yesterday amid concern U.S. growth is sputtering and Europe’s debt crisis will damage the banking system, damping demand in two of Japan’s biggest markets.
The Standard & Poor’s 500 Index climbed 2.3 percent yesterday after a euro-region central bank official said the ECB may discuss buying some loan-backed securities from banks at a policy meeting on Oct. 6. Bank of America Corp. and JPMorgan Chase & Co. rose at least 4.6 percent. Futures on the S&P were little changed today.
Lenders Advance
Sumitomo Mitsui Financial Group, Japan’s second-largest publically traded lender, climbed 2.8 percent to 2,135 yen. Mitsubishi UFJ Financial Group Inc. gained 3 percent to 339 yen. Japan’s biggest bank by market capitalization also got a boost after Daiwa Securities Group Inc. raised the lender’s investment rating to “outperform” from “neutral.”
The European Central Bank may also discuss offering 12- month loans to banks again at the Oct. 6 policy meeting, according to the official. Interest-rate cuts are likely to be discussed, though they are not on the agenda, the official said. A spokesman for the Frankfurt-based ECB declined to comment.
Japanese exporters to Europe advanced as the yen weakened against the shared currency. Canon gained 2.4 percent to 3,440 yen. Olympus Corp., an optical-equipment maker that generates more than 20 percent of its sales in Europe, jumped 5.5 percent to 2,396 yen. Shares also rose after Cosmo Securities Co. initiated coverage of the endoscope maker with a rating of “neutral plus” and a price target of 2,800 yen.
Sumitomo Metal
The euro gained to as much as 103.57 yen today in Tokyo, compared with 102.18 at the close of stock trading yesterday. A stronger euro boosts the value of some income for Japanese exporters.
Resource companies gained after copper futures for December delivery advanced for the first time in three trading days. Sumitomo Metal Mining jumped 3.3 percent to 1,059 yen. Mitsui Mining & Smelting Co. also climbed 3.1 percent to 201 yen.
Toshiba Corp. and Tokyo Electron Ltd., two Japanese companies among many that go ex-dividend tomorrow, both advanced at least 3.1 percent. Today is the last day to buy shares in the companies and still get a first-half dividend. (Bloomberg)
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