Japan’s Topix Swings as Steel Advances, Foodmakers Drop

Japan’s Topix Index (TPX) extended a 4 1/2-year high as steelmakers rallied and GS Yuasa Corp. (6674) jumped after Dreamliner flights resumed in the U.S. Gains were limited as property developers slid.

Kobe Steel Ltd. advanced 19 percent, rising for a second day, to lead an index of the alloy makers higher after Prime Minister Shinzo Abe vowed to boost infrastructure exports. GS Yuasa, the maker of batteries for Boeing Co.’s 787 Dreamliner, rose 17 percent after the grounded plane restarted U.S. flights. SoftBank Corp. tumbled 3.8 percent as takeover target Sprint Nextel Corp. courted a competing bid. Mitsubishi Estate Co., Japan’s biggest developer by market value, lost 2.3 percent.

The Topix climbed less than 0.1 percent to close at 1,270.39 in Tokyo, the highest since August 2008. The Nikkei 225 Stock Average (NKY) increased 0.1 percent to 15,381.02, with volume 70 percent above the 30-day average.

“The market is trading sideways, but the trend is still up,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees the equivalent of $33 billion. “There is some profit taking going on, while some stocks that were late into the market rally are catching-up.”

The Topix has risen almost 48 percent this year, outperforming all major equity indexes amid unprecedented easing from the Bank of Japan. The gauge traded at 1.4 times book value, compared with about 2.5 for the Standard & Poor’s 500 Index and 1.7 for the Stoxx Europe 600 Index.

GS Yuasa

GS Yuasa gained 17 percent to 558 yen, the most since November 2008. United Airlines, the only U.S. Dreamliner operator, resumed flights yesterday after a more than three-month grounding.

Steelmakers, which lagged the Topix this year until the end of last week, climbed 6.7 percent in the last two days to lead gains among the 33 Topix industry groups. Abe last week vowed to triple infrastructure exports as part of his growth plan.

Mitsubishi Steel Manufacturing Co. surged 18 percent to 282 yen today. Pacific Metals Co. jumped 10 percent to 614 yen.

Kobe Steel Ltd. led gains among makers of the alloy, climbing for a second day, after saying it planned to sell its stake in hydraulic-equipment maker Nabtesco Corp. The stock soared 19 percent to 176 yen.

Sumitomo Corp. surged 11 percent to 1,561 yen after the trading company said it won a contract to upgrade communications infrastructure in Myanmar with NEC Corp. NEC added 6.8 percent to 284 yen.

Among stocks that fell, SoftBank, which last year offered $20.1 billion for 70 percent of Sprint, slid 3 percent to 5,900 yen. Sprint said it will engage in talks with Dish, which bid $25.5 billion for all of the U.S. mobile carrier. SoftBank plans to to sell 400 billion yen ($3.9 billion) of bonds to fund the deal, it said today in a filing.

Overheating Sign

The Topix’s 14-day Relative Strength Index was at 77 yesterday, above the 70 threshold that some investors say signals the measure is overbought.

Yakult Honsha Co. tumbled 5.8 percent to 4,805 yen. The yogurt-drink maker has fallen 9.2 percent in the last three days after reaching its highest level since September 1989.

A gauge of real estate stocks slumped the most among the 33 Topix industry groups today. The measure is about 50 percent above its 200-day moving average, according to data compiled by Bloomberg.

Mitsui Fudosan Co. sank 3 percent to 3,240 yen. Mitsubishi Estate lost 2.3 percent to 2,829 yen and Sumitomo Realty & Development Co. fell 3.1 percent to 4,525 yen.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net

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

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