BS: Japan’s Topix Gains Most in Two Months on U.S. Production Data
Feb. 2 (Bloomberg) -- Japanese stocks gained, driving up the Topix by the most since Nov. 18, after company earnings improved and U.S. manufacturing expanded, boosting confidence in the global economic recovery.
Mitsubishi UFJ Financial Group Inc., Japan’s biggest publicly traded bank, jumped 4.5 percent. Toyota Motor Corp., the world’s largest carmaker, climbed 3.3 percent after reporting U.S. sales jumped. Casio Computer Co., an electronics maker, leapt 6.6 percent after it returned to profit. Mitsubishi Materials Corp., a producer of non-ferrous metals, gained 5.6 percent after the Nikkei newspaper reported the company had a nine-month profit.
The U.S. economic recovery “is leading to better company earnings,” said Koichi Kurose, chief strategist in Tokyo at Resona Bank Ltd., which manages about $57 billion in assets. “Bank shares are a leading indicator of the economy,” so they are rising.
The Nikkei 225 Stock Average rose 1.8 percent to 10,457.36 at the close in Tokyo. The Topix gained 1.8 percent to 929.64, with more than eight times as many shares advancing as falling. All of the 33 industry groups on the Topix climbed.
The Topix has increased 3.4 percent this year and stocks in the index were valued at 16 times estimated earnings on average, compared with 13.7 times for the Standard & Poor’s 500 Index and 11.3 times for the Stoxx Europe 600 Index.
U.S. Market
The S&P 500 gained 1.7 percent yesterday in New York, the most since Dec. 1, after American manufacturing expanded and United Parcel Service Inc. beat analysts’ earnings estimates. The Dow Jones Industrial Average closed above 12,000 for the first since June 2008.
The Institute for Supply Management’s U.S. factory index rose to 60.8, beating the median economist projection of 58, figures from the Tempe, Arizona-based group showed yesterday. Readings greater than 50 signal growth.
U.S. manufacturing and company earnings “are steadily recovering, buoyed by the nation’s low interest rates and rapid growth in China and other emerging countries,” said Hiroichi Nishi, an equities manager in Tokyo at Nikko Cordial Securities Inc. “Japanese companies are in good shape. Many of them had nine-month earnings exceeding 75 percent of their annual profits.”
This week is the peak for quarterly results in Japan, with more than a third of the Topix’s 1,668 companies scheduled to report. Of the 636 that have published net income for the last quarter, 87 have exceeded analysts’ estimates and 72 have missed them, according to data compiled by Bloomberg.
The London Metal Exchange Index of six metals including copper and aluminum advanced 1.8 percent yesterday, rising for a fifth day to the highest level since March 2008. Gold futures for April delivery climbed 0.4 percent to settle at $1,340.30 in New York yesterday. Copper yesterday advanced to a record on signs demand will remain robust in China, the world’s biggest consumer of the metal used in cars, homes and appliances. Aluminum and nickel increased to two-year highs.
