Japanese indexes finishes at 15-month high with help from boost in Fujitsu U.K. contract.
September 18, 2003: 7:11 AM EDT
TOKYO (Reuters) - Japan's Nikkei stock average closed above 11,000 for the first time in 15 months Thursday, spurred higher by Fujitsu's late-day rally on news the computer giant had sealed a big rise in the value of its contract with the British government.
Large banks including Mizuho Financial Group Inc also lured active buying, more than offsetting selling pressure on Toyota Motor Corp and other auto makers due to a drop on Wall Street and concerns about a strengthening yen.
The Nikkei closed up 43.21 points, or 0.4 percent, at 11,033.32 after ending the morning down one percent. The TOPIX index gained 0.3 percent to 1,075.73, up for a fourth straight session and at a new 15-month high.
"This news on Fujitsu put a little fire under the market," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
Fujitsu Ltd jumped 9.5 percent to ¥634 in heavy trade after it said its 10-year contract with Britain on information technology (IT) infrastructure services had been revised up to £929 million ($1.5 billion) from £680 million, an increase of 37 percent.
The revision of the contract, originally signed in 1999, was aimed at enhancing the government's electronic system to provide administrative services through the Internet, Fujitsu said.
Banks maintained their bullish trend due to recent signs the Japanese economy is improving, and expectations the rising stock market will boost the value of their massive share portfolios, helping the sector score a profit in the current business year.
"We are also seeing investors buying back bank stocks they borrowed and shorted earlier this year," said Terushi Hirotama, head of trading at Ichiyoshi Securities, referring to a move by hedge funds and other short-sellers to return borrowed shares.
Mizuho, the world's largest bank by assets, rose 5.7 percent to ¥240,000, up 66 percent since the start of September. UFJ Holdings Inc, Japan's fourth-largest bank, climbed 5.9 percent to an all-time closing high of ¥467,000.
Retail stocks were also in favor simply because they have significantly underperformed the Nikkei during its 45 percent rally off a two-decade low in April. Ito Yokado Ltd, Japan's largest retailer, rose 3.6 percent to ¥3,790.
"Money isn't leaving this market, it's just rotating around looking for laggard shares," Ichiyoshi's Hirotama said.
Autos weak
Trading volume was brisk, with 1.43 billion shares changing hands on the first section but down a notch from Wednesday's 1.81 billion. Turnover exceeded ¥1 trillion ($8.61 billion) for the 13th straight session. Advancers edged decliners 698 to 696.
The dollar's fall below the ¥116 level in New York sparked a round of profit-taking on auto makers and several tech shares including industrial robot firm Fanuc Ltd and video and audio equipment manufacturer Victor Co of Japan (JVC).
Toyota, which had climbed 10.5 percent in the past three sessions to Wednesday's 18-month closing high, lost 2.3 percent to ¥3,800, while Fanuc gave up 2.7 percent to ¥7,350 and JVC slipped 2.6 percent to ¥1,074.
"A lot of people are talking about the Nikkei rallying as far as 12,000...but the yen is a major concern," said Kiyoshi Yamanaka, portfolio manager at T & D Asset Management. "If the dollar goes to 115 yen and keeps strengthening, the stock market will probably correct."
The Nikkei's 45 percent bull run since April 28 marks the average's best performance over a five-month time frame in 31 years, according to the Nihon Keizai Shimbun. It also rose 45 percent between June and November 1972, a period characterized by then Prime Minister Kakuei Tanaka's ambitious spending plans to promote economic growth.
But unlike many rallies in the past, the current surge has been due in large part to the efforts of individual corporations which have been cutting costs and restructuring at speed.
Kyocera Corp, for one, has been restructuring its mainstay electronics parts business and its U.S. mobile phone division and analysts say its efforts have begun to bear fruit.
Shares of Kyocera ended up 0.3 percent at ¥7,880, recovering from an earlier fall of three percent after the firm told Reuters it expects a strong U.S. holiday shopping season to double its shipments of mobile phones there versus a year ago.
Chief Executive Yasuo Nishiguchi said he expected U.S. mobile phone shipments for September to November -- the key period before the Christmas shopping season -- to hit five million units, twice the year-earlier amount.
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