RTTNews - The stock market in Japan ended higher on Monday, led by resource stocks on higher commodity and oil prices in the international market. The imminent filing of bankruptcy by U.S. automaker General Motors later in the day in the U.S., Chinese manufacturing data as well as a positive closing by Wall Street stocks on Friday lifted market sentiment.
In the U.S., the major indices continued their northward march for the second day on increasing hopes of recovery in the economy. A revised reading of the consumer sentiment report for May from Reuters and the University of Michigan came in at 68.7, higher than the previously reported reading of 67.9. The result was also higher than April's final level of 65.1. Analysts expected the survey to yield a reading of 68.0.
In a separate report, the Commerce Department said that gross domestic product for the first quarter contracted at a slower rate than previously estimated. As per the report, gross domestic product fell 5.7% in the first quarter compared to the advance estimate of a 6.1% decrease. Economists had been expecting the pace of contraction to be revised to 5.5%.
Optimism about the economy received a minor jolt when manufacturing data from the Chicago area continued to show a notable slowdown in the region. The ISM-Chicago said its index of activity in the manufacturing sector fell to 34.9 in May from 40.1 in April, with a reading below 50 indicating a contraction. Economists expected the index to edge up to a reading of 42.0.
Notwithstanding mixed reports on the economic front, the Dow closed up 96.53 points or 1.2% at 8500, the Nasdaq closed up 22.54 points or 1.3% at 1774, and the S&P 500 finished up 12.31 points or 1.4% at 919.
The Nikkei 225 Average opened slightly weaker at 9,517 compared to its previous close at 9,522 on profit taking following recent gains. Thereafter, the market reversed the trend and moved above the unchanged line. Higher commodity prices, Chinese manufacturing data and positive sentiment across the Asian markets lifted the sentiment and drove the index to the day's high of 9,692. The benchmark index ended a shade lower at 9,678, representing a gain of 155.25 points, or 1.63%. The broader Topix Index of all first section issues gained 14.61 points, or 1.63%, to close at 913.
On the economic front, the Ministry of Health, Labor and Welfare revealed that labor cash earnings for companies with five or more employees eased 2.5% year-on-year in April following a revised 3.9% fall in March. Analysts expected earnings to slip 4.2% year-on-year. Separately, the Japan Automobile Dealers' Association stated that domestic automobile sales dropped 19.4% year-over-year in May to178, 503 units, compared to 28.6% drop in vehicle sales during April.
Crude oil prices ended up $1.26 to $67.53 a barrel in Asian trading. Light crude oil price for July delivery closed at $66.31 in New York Mercantile Exchange on Friday on increasing optimism about a recovery led by consumer spending.
Inpex, the leading oil exporter in the country, added 0.65%, Showa Shell advanced 1.80% and Nippon Oil gained 2.24%.
The shares of Konica Minolta hit the upper limit, ending the day with a gain of 9.79% after Goldman Sachs raised the rating for the company by one notch to buy on expectation of more upside growth for the company in the medium term in the sector.
Shipping stocks continued to advance following Chinese manufacturing data. Kawasaki Kisen surged up 7.42%, Mitsui OSK Lines advanced 6.36% and Nippon Yusen rose 5.04%.
Among financial stocks, Mitsuibishi UFJ gained 2.84%, Mizuho Financial advanced 3.95%, Resona Holdings added 2.31% and Sumitomo Mitsui rose 2.72%. Nomura Holdings gained 3.63% after the brokerage revealed that it is conducting a survey of the market to gauge the demand, terms and pricing for raising funds through the issue of straight bonds under its shelf registration.
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