RTTNews - The stock market in Japan managed to end in positive territory despite weak cues from Wall Street and concerns about a global recovery. The gains were aided by the local currency, which slipped beyond 96 yen per US dollar. Automakers advanced following news that U.S. automaker General Motors might be left with no other alternative than filing for bankruptcy, providing leeway for domestic automakers to build market share.
In the U.S., a report from the National Association of Realtors said that U.S. existing home sales rose 2.9% to an annual rate of 4.68 million units in April from a downwardly revised rate of 4.55 million units in March. Economists had expected sales to rise to a 4.66 million unit rate from the 4.57 million unit rate originally reported for the previous month. While the pace of existing home sales increased compared to the previous month, total housing inventories at the end of April represented a 10.2-month supply compared with a 9.6-month supply in March. In another development, the Treasury Department's auction of $35.0 billion worth of 5-year notes drew a high-yield of 2.310% while attracting moderately strong demand, with the bid-to-cover ratio coming in at 2.32.
Across-the-board selling was witnessed in late trading on concerns higher cost of borrowing might apply brakes on economic recovery. The Dow closed down 173.47 points or 2.1% at 8,300, the Nasdaq closed down 19.35 points or 1.1% at 1,731 and the S&P 500 closed down 17.27 points or 1.9% at 893.
The Nikkei 225 Average opened weaker at 9,353 compared to its previous close at 9,439, mirroring the losses on Wall Street. However, automakers helped stage a smart recovery in early trading and a weaker yen encouraged exporters. Better than expected retail sales data also lifted sentiment. The index recovered the losses in early trading and moved above the unchanged line in afternoon session to the day's high of 9,493 before finally closing with a gain of 12.62 points or 0.13% at 9,451. The broader Topix Index of all first section issues ended at 896, up 2.74 points, or 0.3%.
On the economic front, the Ministry of Economy, Trade and Industry revealed that retail sales declined 2.9% year-over-year during April. Analysts expected the sales to drop 3.3% during the month. The retail sales for March were revised to a negative 3.8% from the previously announced 3.9% decline.
General chemical firm Asahi Kasei Corp. advanced 2.43% after JP Morgan Securities raised the rating for the company to buy and also revised the stock price target upwards, citing better prospects for the company in non-petrochemical business segments and relatively less reliance on petrochemicals.
Tech exporters Canon Inc edged up 0.63% and Sanyo Electric surged 5.24%. In the auto space, Toyota Motor advanced 2.70%, Honda Motor added 2.39% and Isuzu Motors added 2.58%.
Financial stocks ended mixed. Mitsuibishi UFJ added 0.32% and Resona Holdings rose 0.77%. However, Sumitomo Mitsui lost 1.13% and Mizuho Financial slipped 0.53%.
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