RTTNews - The stock market in Japan ended in positive territory on Tuesday, led by exporters, automobiles and resource stocks. Strong closing on Wall Street on Monday and the weaker local currency led exporters, while automakers gained following the bankruptcy filing by GM in New York on Monday. However, profit taking in late trading trimmed the gains as market participants await key economic data from the U.S. during the course of the week.
In the U.S., a slew of positive economic data lifted the market sentiment on Monday. A report released by the Institute for Supply Management showed that the ISM index of activity in manufacturing sector rose to 42.8 in May from 40.1 in April, signaling a slower pace of contraction in activity in the manufacturing sector in the month of April. Economists had been expecting the index to edge up to a reading of 42.0. A turnaround in new orders contributed to the improvement in the sector, with the new orders index climbing to 51.1 in May from 47.2 in April. This marked the first time the index has been above 50 since November of 2007.
A report released by the Commerce Department showed that construction spending unexpectedly increased in the month of April, reflecting a notable increase in spending on private construction. In a separate report, the Commerce Department stated that personal income unexpectedly rose in the month of April, with the increase partly due to the reduced taxes and increased social benefit payments associated with the government's economic stimulus plan.
The Dow closed up 221.11 points or 2.6% at 8,721, the Nasdaq finished up by 54.35 points or 3.1%, at 1,829, and the S&P 500 rose 23.73 points or 2.6% to 943.
The Nikkei 225 Average opened higher by nearly 100 points at 9,775 compared to its previous close at 9,678, mirroring the gains on Wall Street. However, the index trimmed some of the gains on short covering in early trading, although it could sustain the gains due to buoyancy among exporters, who benefited from a weaker yen.
Nevertheless, profit taking in late trading ahead of the release of key economic numbers in the U.S during the course of the week, trimmed the gains. The benchmark index finally ended the session at 9,704, up 26.56 points, or 0.27%. The broader Topix Index of all first section issues gained 1.04 points, or 0.10% to close at 914.
On the economic front, the Bank of Japan revealed that the monetary base in the country rose 7.9% year-over-year in May to 94.91 trillion yen, which was a tad lower than analysts' expectation for an 8% annual increase over April. Banknotes in circulation were up 1.1%, while coins in circulation eased 0.2%, the data revealed.
Crude oil prices ended weaker by $0.58 to $68.03 a barrel in Asian trading. Light crude oil price for July delivery closed at $68.58 in New York Mercantile Exchange on Monday on expectation of a rise in demand and weaker dollar.
In the export space, Canon gained 0.97% and Sony Corp. advanced 4.26%. Automakers also advanced, with Honda Motor gaining 2.17%, Toyota Motor adding 0.79% and Nissan Motor Co., moving up 1.71%.
Shipping stocks, which had rallied in recent sessions, declined on profit taking. Kawasaki Kisen lost 2.16%, Mitsui OSK Lines shed 2.92% and Nippon Yusen fell 1.67%.
Financial stocks ended mixed. Mitsuibishi UFJ gained 0.81%, and Mizuho Financial edged up 0.45%. However, Resona Holdings lost 0.75% and Sumitomo Mitsui shed 1.59%. Oil stocks also ended mixed. While Inpex, the leading oil exporter in the country, edged up 0.37%, Showa Shell lost 1.04% and Nippon Oil declined 1.52%.
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