RTTNews - Nikkei breaches 10,000 mark, moves further up on recovery, earnings hopes

The Japanese market opened on a buoyant note on Monday and mirroring strong gains posted by front line stocks, the benchmark index Nikkei sped past the psychological 10,000 mark for the first time in four weeks.

The Nikkei, which opened 0.77% up at 10,021 this morning, is currently trading at 10,121, up 176.8 points or 1.78% over its previous close. The Nikkei had ended at 9,945, recording a gain of 151.6 points or 1.55%, on Friday.

Stocks across the board surged higher in early trading today with those from construction and securities space leading the charge. Hopes of strong results from leading companies and confidence about a U.S. economic recovery are driving the market up sharply once again.

Bank stocks are mostly trading higher, with Sumitomo Mitsui, Resona Holdings, Chiba Bank, Mitsubishi UFJ and Sumitomo Trust and Banking gaining 2% - 3%.

In the automobile space, Toyota Motor, Suzuki Motor and Honda Motor are trading with notable gains.

Foods, chemicals and pharmaceuticals are mostly trading higher. Telecommunications, steel, machinery and electric machinery stocks are also seen trading in positive territory. Non-ferrous metals and insurance stocks are exhibiting a mixed trend.

Shares of Hitachi Ltd. soared Monday morning on reports the company is planning to turn Hitachi Maxell Ltd. and four other listed group firms into wholly owned units. Investors bought on expectation that Hitachi's earnings for the year through March 2010 will come in better than the projected 270 billion yen net loss, as the move would allow the company to retain profits that are currently distributed to minority shareholders. The company, however, has said that it has not officially announced it would make Hitachi Maxell Ltd. and four other affiliates its wholly owned units. The Hitachi stock is up by over 5% this morning.

Softbank Corp. rebounded on reports that firm's group operating profit likely rose 20% year-on-year to more than 100 billion yen for the April-June quarter. This would be the first time the mobile phone company's group operating profit would be exceeding 100 billion yen on a quarterly basis. The stock is currently up by close to 4%.

Sompo Japan Insurance Inc. moved up after details of the planned April 2010 merger with Nipponkoa Insurance Co. came to light. According to reports, the insurers are considering allocating 0.85-0.9 Nipponkoa share for each Sompo Japan share. However, the two firms have said they have not yet reached a decision that should be made public. The stock is currently trading up 3% on its previous close.

Shares of leading securities firm Nomura Holdings are up sharply on hopes the company is back in the black after suffering net losses for five consecutive quarters. The stock is gaining over 3% now. Shares of another leading securities firm Daiwa Securities Group are also gaining in strength on hopes of strong quarterly earnings.

In the currency market, the U.S. dollar traded in the upper 94-yen zone early Monday in Tokyo, slightly down from its late Friday quotes in New York. In early trading, the dollar fetched 94.70-75 yen against Friday's close of 94.78-88 yen in New York and 94.82-85 yen in Tokyo. The yen is currently trading at 94.73 to the U.S. dollar.

Among other markets in the Asia-Pacific region, Australia, New Zealand and Korea are trading sharply higher with their benchmark indices surging 1.25% - 1.5% over Friday's closing levels. Shanghai, Singapore and Taiwan are trading in positive territory with notable gains. Stock markets across the region had finished on the upside on Friday.

Wall Street rebounded from lower levels and ended around the unchanged the line on Friday, shrugging off some weak quarterly numbers and a mixed report from Reuters and the University of Michigan, which showed that their reading on consumer sentiment for the month of July was upwardly revised from the preliminary reading but still came in well below the previous month.

The Nasdaq ended in the red for the first time in nearly two weeks as it slipped by 7.64 points or 0.4% to 1,966, the Dow climbed 23.95 points or 0.3% to 9,093 and the S&P 500 rose by 2.97 points or 0.3% to 979.

Major European markets closed on a mixed note, with the German DAX index and the French CAC 40 index finishing down by 0.4% and 0.2% respectively. The FTSE 100 index of the U.K. edged up by 0.4%.

Oil finished a choppy session higher on Friday as traders continued to show optimism the global economy is on the mend, which would improve energy demand. Light sweet crude for September delivery moved up to US$68.05 per barrel, up 89 cents for the session. Prices touched as low as US$66.46, but later touched as high as US$68.18.

For comments and feedback: contact editorial@rttnews.com