Nikkei tops 16,000 on property, oil stocks

First Published:	28/09/2006 12:21:36
The Nikkei average closed above 16,000 for the first time in almost three weeks on Thursday, rising 0.48 percent as property firms continued to recover from a recent slide, while INPEX Holdings Inc. and other energy firms gained after a jump in crude oil prices. Shares of consumer lenders such as Acom Co. Ltd. rose after Japan's newly appointed financial services minister made comments suggesting he may be opposed to tighter regulation of the industry. "Shares of real estate firms, banks and trading companies -- stocks that are sensitive to economic cycles -- have rebounded ... as investors have become more positive about the outlook for the U.S. economy," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. An unexpected rise in U.S. August new homes sales data out on Wednesday renewed optimism about consumer spending in the world's largest economy, a key market for Japanese goods. The Nikkei <.N225> finished 76.98 points higher at 16,024.85, the average's first close above 16,000 since September 8. The broader TOPIX index <.TOPX> gained 0.72 percent to 1,602.57. Property firm Mitsubishi Estate Co. Ltd. gained 2.4 percent to 2,525 yen, adding to its advance in the previous session. The issue fell as low as 2,365 yen on Monday, a decline of 13 percent from a five-month high hit earlier this month. Rival Mitsui Fudosan Co. Ltd. rose 1.7 percent to 2,640 yen, adding to a 2 percent gain in the previous session. U.S. crude oil futures shot up above $63 a barrel on Wednesday, sending some energy stocks higher. Gas and oil developer INPEX rose 1.7 percent to 937,000 yen and oil refiner AOC Holdings Inc. added 2.9 percent to 2,105 yen. GAINS LIKELY LIMITED With the Dow Jones Industrial average <.DJI> up some 9 percent on the year, it may be difficult to expect further upside from U.S. stocks -- and therefore their Japanese counterparts -- this year, said Marc Desmidt, head of the Japanese large-cap equity team at Merrill Lynch Investment Managers. "On the positive side, there's decent earnings (and) good valuations. On the negative side, I don't think global markets, -- or the global economic conditions -- are going to be providing a very favorable backdrop after the decent rally they've already had this year," Desmidt said. Elsewhere, Acom climbed 6.2 percent to 4,990 yen after Japan's new financial services minister, Yuji Yamamoto, said on Wednesday that unduly strict regulation of moneylenders could hurt cash-strapped borrowers by driving them to unlicensed loan sharks. Yamamoto's comments suggested he may be opposed to a current bill that would slash the highest rate lenders can legally charge by a third or more. Currently, Japanese consumer lenders can charge their customers interest rates as high as 29.2 percent. Shares of Kyocera Corp. edged down 0.5 percent to 10,150 yen after Credit Suisse in a report on Wednesday downgraded the stock to "neutral" from "outperform", forecasting slower profit growth ahead. Shares of data center operator Media Exchange Inc. were untraded for the second straight day on the Mothers market for start-ups, flooded with buy orders. The stock ended the session facing a glut of buy orders at 82,800 yen, an increase of 22 percent since Tuesday's close of 67,800 yen. Investors have flocked to the stock since business daily Nihon Keizai reported on Wednesday that the company, which is 51.6 percent owned by Livedoor Co., is attempting to distance itself from the scandal-hit Internet firm by joining up with a unit of KDDI Corp. An official at Media Exchange denied the report, saying the company had made no such decision. Trade was slow, with just 1.40 billion shares changing hands on the Tokyo exchange's first section. Advancers beat decliners by a ratio of more than two to one.
Source:  Reuters http://www.reuters.com