May 20 (Bloomberg) -- Japanese stocks rose as domestic production figures pointed to a bottoming of the economy and resource companies gained on oil and shipping fees. T&D Holdings Inc. led insurers lower after posting a worse-than-forecast loss.

Mitsubishi Corp., a trading company that gets more than half its profit from commodities, jumped 5 percent as Goldman, Sachs & Co. recommended the stock. Kawasaki Kisen Kaisha Ltd., Japan’s No. 3 shipping line, added 4.7 percent as commodity shipping fees advanced for a 13th session. T&D Holdings, the nation’s biggest listed life insurer, plunged 15 percent.

Japan’s gross domestic product shrank an annualized 15.2 percent in the three months to March 31, the Cabinet Office said today. Economists had estimated a 16.1 percent contraction.

The Nikkei 225 Stock Average advanced 54.35, or 0.6 percent, to close at 9,344.64 in Tokyo. The broader Topix index rose 6.54, or 0.7 percent, to 886.30, with three stocks climbing for each that slumped.

“The GDP contraction is, by and large, within expectations. That supports investor confidence and spurs people to buy,” said Yoshihiro Ito, senior strategist at Tokyo-based Okasan Asset Management Co., which oversees the equivalent of $9.3 billion. “Shares of companies that rely on demand in emerging markets, such as trading houses, show resilience, reflecting growth prospects for China’s economy.”

The Nikkei had surged by almost a third from a 26-year low on March 10 amid optimism government spending, including stimulus packages in Japan and China worth a combined $747 billion, will revive economic growth. Stocks on the Nikkei trade at 1.27 times average book value, compared with 3.04 times for China’s CSI 300 Index, according to Bloomberg data.

Trading Companies

Mitsubishi, Japan’s biggest trading company by value, leapt 5 percent to 1,744 yen, while closest competitor Mitsui & Co. added 5.9 percent to 1,176 yen. Trading companies were the biggest contributor to the Topix’s gain among the gauge’s 33 industry groups.

Goldman Sachs raised its view on Japan’s trading house sector to “attractive” from “neutral,” saying the global economic slump has bottomed out. The brokerage also lifted Mitsubishi to “buy” from “neutral.”

Crude oil for June delivery rose 1.1 percent to $59.65 a barrel in New York yesterday, the highest settlement since Nov. 10. The Baltic Dry Index, a measure of shipping costs for commodities, jumped for a 13th-straight session to a level not seen in seven months.

Kawasaki Kisen added 4.7 percent to 404 yen. Mitsui O.S.K. Lines Ltd., Japan’s No. 2 shipping line, advanced 2.1 percent to 633 yen after Goldman Sachs boosted the rating on the stock to “buy” from “neutral,” citing China’s economic recovery.

‘Attractive’ Investment

“China’s stimulus package is starting to create many mini- bubbles and demand for commodities will likely continue to increase,” said Akio Yoshino, chief economist at Societe Generale Asset Management (Japan) Co., which oversees about $25 billion. “Because of their solid financial health and resilient cash flows, trading companies and shipping lines offer attractive investment opportunities.”

T&D plummeted 15 percent to 2,760 yen, driving insurance companies to the biggest decline among Topix groups. The insurer posted an 89.1 billion yen ($932 million) loss for the year ended March 31, wider than its 84 billion yen deficit projection. Nomura Holdings Inc. slashed its rating on the stock to “reduce” from “buy.”

Sony Financial Holdings Inc., which operates insurance subsidiaries, lost 7.6 percent to 299,400 yen. Tokio Marine Holdings Inc., Japan’s biggest casualty insurer, lost 2.6 percent to 2,825 yen.

Nikkei futures expiring in June added 0.3 percent to 9,330 in Osaka and dipped 0.1 percent to 9,335 in Singapore.

To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.

Last Updated: May 20, 2009 02:48 EDT