Japanese Stocks Advance After ANA Raises Forecast, Shipping Lines Surge

Japanese shares advanced, with the Topix (TPX) Index snapping a four-day loss, after All Nippon Airways (9202) Co. raised its operating profit forecast and Mitsui O.S.K. Lines Ltd. led shipping companies higher.

All Nippon Airways, Asia’s largest listed carrier by sales, jumped 6.8 percent. Mitsui O.S.K. led a rebound among cargo lines after Jefferies Group Inc. boosted its target price. Unicharm Corp. (8113) rose 2.1 percent after a report the diaper maker will double its production capacity in India.

“Earnings aren’t looking that bad,” said Hisakazu Amano, who helps oversee the equivalent of $29 billion at T&D Asset Management Co. in Tokyo. “Investors aren’t buying across the board, but they’re picking companies that have specific strengths and that’s buoying the market.”

The Topix, Japan’s broadest gauge of equities, climbed 0.4 percent to 757.96 at the 3 p.m. close in Tokyo, with about five shares rising for every three that fell. The Nikkei 225 Stock Average added 0.1 percent to 8,809.79.

Futures on the Standard & Poor’s 500 Index slid 0.2 percent today. The gauge fell 0.1 percent in New York yesterday after reports showed consumer confidence unexpectedly dropped in January and home prices fell more than estimated in November.

Transportation Stocks Rise

All Nippon Airways soared 6.8 percent to 237 yen, the biggest advance on the Nikkei 225 (NKY), after raising its full-year operating profit forecast 29 percent to 90 billion yen ($1.2 billion) as it speeds cost cuts.

Mitsui O.S.K. gained 5.9 percent to 305 yen after its target price was lifted to 400 yen from 380 yen by Jefferies. Nippon Yusen K.K. rose 5.7 percent to 204 yen and Kawasaki Kisen Kaisha Ltd. (9107) climbed 5.6 percent to 152 yen after Jefferies raised its rating on the shippers to “buy” from “hold.” The shipping sector is rebounding after posting the second-worst performance among the Topix’s industry groups last year.

Unicharm increased 2.1 percent to 4,090 yen after the Nikkei newspaper reported the diaper maker will build a second factory in India this year.

Earnings Season

Of the 599 companies on the Topix that have posted results for the latest quarter so far this year, 66 have exceeded analysts’ estimates, while 112 have fallen short, according to data compiled by Bloomberg.

The Topix (TPX) plunged 19 percent last year after the record March 11 earthquake and resulting nuclear disaster at the Fukushima power plant. The decline has cut the price of shares on the index to 0.9 times book value, compared with 2.1 times for the S&P 500 and 1.4 times for the Europe Stoxx 600 Index.

“A certain amount of money is flowing into Japanese stocks because they are relatively undervalued in terms of price-book ratios among global markets,” said Kazuyuki Terao, chief investment officer of RCM Japan Co. “Japanese company earnings in the current period aren’t good as a whole, but they are likely to recover after April.”

Okuma Corp. (6103) increased 3.8 percent to 574 yen after swinging to profit. The machine-tool maker reported net income of 4.72 billion yen for the nine months ended Dec. 31, with a 46 percent jump in sales and cost cuts. The company recorded a loss of 2.53 billion yen a year earlier.

Sumitomo Heavy Industries Ltd. (6302) declined the most in the Nikkei 225. The company plunged 9.8 percent to 440 yen after cutting its net-income forecast 29 percent to 20 billion yen, citing costs tied to defective construction and reversal of deferred tax assets.

-- With assistance from Masaaki Iwamoto and Satoshi Kawano in Tokyo. Editors: Jim Powell, Jason Clenfield.

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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