March 4 (Bloomberg) -- Japan's Topix stock index rose as Inpex Corp. led gains by oil-related shares after New York crude futures reached their highest in more than four months.

Sumitomo Metal Mining Co., Japan's biggest gold smelter, jumped after the government said it found new gold deposits in the country's biggest gold mine. Sumitomo Metal Industries Ltd. climbed after UBS AG raised its estimate price on the stock citing the company's effort to boost dividend payments.

``I'm still bullish on natural resource stocks because you can't deny their earnings potential,'' said Shigeharu Shiraishi, who helps oversee the equivalent of $16 billion in assets as a managing director at Societe Generale Asset Management (Japan) Co. in Tokyo. ``The gain in commodity prices is a reflection of surging global demand, and that's going to support their shares.''

The Topix gained 2.27, or 0.2 percent, to 1191.79 as of 1:54 p.m. in Tokyo. The Nikkei 225 Stock Average was little changed, adding 3.61 points to 11,860.07. The average earlier fell as much as 0.7 percent as some analysts said a rally that sent the benchmark to its longest winning streak in more than four years was excessive after oil prices jumped.

Nikkei 225 futures for March delivery advanced 0.2 percent to 11,860 in Osaka and rose 0.4 percent to 11,870 in Singapore.

Both benchmarks are set for winning weeks. The Topix has gained 2.1 percent and is poised to complete its sixth winning week, matching the series of weekly advances ended April 23. The Nikkei has added 1.7 percent.

Some 974 billion yen ($9.2 billion) in shares included in the Topix traded, 17 percent less than the daily average for the past three months. The number of stocks that rose and fell was almost equal with 735 rising and 734 falling on the Tokyo Stock Exchange's first section.

Oil Beneficiaries

The Topix Mining Index, which includes Inpex, jumped 3.5 percent, making it the best performer among the benchmark's 33 constituent industry groups.

Crude oil futures for April delivery rose 1 percent to $53.57 a barrel on the New York Mercantile Exchange on speculation that increasing consumption will outpace production.

It earlier reached $55.20, 47 cents short of the all-time high on Oct 25. The contract was recently at $53.52, more than 20 percent higher than the beginning of the year.

Inpex, Japan's largest oil explorer, jumped 20,000 yen, or 3.5 percent, to 590,000. Teikoku Oil Co., the biggest producer of natural gas from fields in Japan, jumped 32 yen, or 4 percent, to 827.

Sumitomo Metal Mining Jumps

Sumitomo Metal Mining jumped 53 yen, or 6.6 percent, to 858, making it the biggest gainer on the Morgan Stanley Capital International World Index during Asian trading. The shares are poised for the biggest percentage gain since Oct. 2, 2003, and the highest close since May 1997.

The Japan Oil, Gas and Metals National Corp., a government body that develops and stockpiles natural resources, made the discovery after drilling for about two years at the Hishikari mine, Kenzo Masuda, an official at the agency, said yesterday.

Sumitomo Metal Industries, Japan's third-biggest steelmaker, advanced 8 yen, or 4.3 percent, to 194.

Atsushi Yamaguchi, a Tokyo-based analyst at UBS, raised his 12-month estimate price on the stock to 220 yen from 210 yen. The steelmaker yesterday raised its full-year profit forecast to 90 billion yen from 85 billion yen and also said it will pay full- year dividend of 4 yen a share, up 2.5 yen from a year ago.

``We had forecast a dividend payment of 3 yen a share,'' Yamaguchi wrote in a note to clients released after the market closed yesterday.

Technical Indicators

The Nikkei swung between gains and losses. The 14-day relative strength measure for the Nikkei, a moving average based on whether the index rose or fell, was at 70 yesterday. A reading above 70 signals the index is set to fall.

The 25-day Toraku index, which compares the number of stocks that have advanced with the number that have declined on the Tokyo Stock Exchange, rose to 119.85. A reading of more than about 120 signals that the benchmark is poised to fall.

Advantest Corp., the heaviest weighted stock on the Nikkei, fell 140 yen, or 1.6 percent, to 8,900. Kyocera Corp., the second heaviest, lost 40 yen, or 0.5 percent, to 7,940.

Some analysts said losses will be short-lived because the outlook on the global economy remains strong.

``Japanese stocks are overheated if you simply look at the technical indicators,'' said Kenji Kobata, an analyst at Ace Securities Co. in Tokyo. ``Fundamentally, Japanese stocks are on solid ground.''

A government report last week showing better-than-expected growth in the U.S. economy, which buys about a third of Japan's exports, triggered the rally. At home, government reports this week showing growth in industrial production that exceeded some economists' estimates and a surge in household spending helped drive stocks higher.

U.S. employers added 225,000 workers to their payrolls in February, the most since October, a report later today in the U.S. may show, economists surveyed by Bloomberg News said.

To contact the reporter on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: March 3, 2005 23:57 EST