RTTNews - The Japanese stock market opened higher on positive cues from Wall Street where stock prices had surged overnight on strong results from leading bank JP Morgan Chase and some encouraging economic data.
As stocks across various sectors surged higher in early trading, the Japanese benchmark index Nikkei rose to 9,421 after opening at 9,413.86. The index is currently up by nearly 42 points or 0.45% at 9,386.
The Nikkei had ended with a gain of nearly 75 points or 0.81% at 9,344 on Thursday.
Construction, foods and chemicals stocks are mostly trading higher. Steel, non-ferrous metals, machinery and electric machinery stocks are also trading firm.
Pharmaceuticals stocks are exhibiting a mixed trend. Among bank stocks, Sumitomo Trust and Banking, Sumitomo Mitsui Financial Group, Mitsubishi UFJ Financial, Bank of Yokohama and Chiba Bank are trading modestly higher.
Shares of Hitachi Construction Machinery Co. are drifting down by around 3% on reports that the company is likely to report a group operating loss of about 5 billion yen for the three months ended June 30, following its 7.9 billion yen in red ink for the January-March quarter. Although demand for excavators picked up in China and other emerging nations, it was not enough to offset the slump in Japan, the U.S. and Europe. The company forecasts that the global market for hydraulic excavators will shrink 20% this fiscal year in volume terms. Its own sales volume dropped by nearly half in the U.S. and Europe, and fell sharply in Japan as well.
Nissan Motor is up by 2.2% on reports the company will begin selling hybrids such as minivans based on its own technology in Japan in 2011, in a bid to compete with such segment pioneers as Toyota Motor Corp. and Honda Motor Co. Toyota Motor and Honda Motor are also trading in positive territory with notable gains.
In the currency market, the U.S. dollar was at the upper 93 yen level early Friday in Tokyo, slightly down from its levels overnight in New York. In early trading today, the dollar fetched 93.68-73 yen compared with Thursday's closing quotes of 93.88-98 yen in New York and 93.76-79 yen in Tokyo. The yen is currently trading at 93.78 to the U.S. dollar.
Among other markets in the Asia-Pacific region, Australia and Singapore are drifted down into the red after trading higher earlier in the day. New Zealand, Korea and Taiwan are trading modestly higher.
On Thursday, Wall Street ended on a firm note, extending a recent upward move despite largely mixed economic and earnings news. On the economic front, a report from the Labor Department showed that first-time claims for unemployment benefits continued to decrease in the week ended July 11th, with initial jobless claims falling by more than economists had been expecting. The report from Federal Reserve Bank of Philadelphia that showed a greater-than-expected fall in the index of manufacturing activity in the Mid-Atlantic region did hurt sentiment to an extent, but data on homebuilder confidence turned out to be a positive for the market.
Strong results from JP Morgan Chase kept the mood upbeat. The Dow closed up by 95.61 points or 1.1% at 8,712, the Nasdaq surged 22.13 points or 1.2% to 1,885 and the S&P 500 moved up by 8.06 points or 0.9% to 941.
Major European markets closed on the upside with moderate margins. The German DAX Index and the French CAC 40 Index moved up by 0.6% and 0.9% respectively while U.K.'s FTSE 100 Index posted a gain of 0.4%.
Crude oil turned to the upside after some early weakness Thursday and finished above the US$62 a barrel mark. A better-than-expected employment report improved expectations for energy demand. Light sweet crude oil for August settlement finished at US$62.05 per barrel, up 51 cents on the session. Earlier, oil had hit as low as US$60.29.
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