Japan’s Topix Index Rebounds on Signs Shares Oversold
Japanese stocks rose, with the Topix (TPX) Index rebounding from its worst slide in nine months, amid speculation shares on the gauge were oversold. Gains in the yen eased, brightening the outlook for exporters.
Nissan Motor Co. (7201), a carmaker that gets almost 80 percent of its revenue overseas, gained 3.1 percent. Video-game developer Konami Corp. (9766) rallied 7.1 percent after plunging 18 percent yesterday. Fuji Heavy Industries Ltd. (7270) soared 7.3 percent after the maker of Subaru cars and industrial machinery forecast profit growth. Marubeni Corp. (8002) rose 3.8 percent on a report the trading house is in talks to buy U.S. grain company Gavilon LLC.
“Technically, the price-to-book ratio is undervalued, and that’s bolstering the market,” said Naoki Fujiwara, who helps oversee $6.5 billion at Shinkin Asset Management Co. in Tokyo. “The yen is correcting after strengthening too much, which is good for the market.”
The Topix rose 0.6 percent to 776.57 at the 3 p.m. close in Tokyo, climbing back from yesterday’s 2.6 percent drop, the steepest since Aug. 5. The Nikkei 225 Stock Average (NKY) gained 0.7 percent to 9,181.65, with volume about 13 percent below the 30- day average.
The 25-day Toraku index, which compares advancing and declining shares, fell to 67.9 yesterday, the lowest since Aug. 24. A reading below 70 suggests stocks are close to bottoming, according to Nomura Holdings Inc.
The Topix has advanced about 6.6 percent this year, rebounding from last year’s 19 percent drop, amid signs the U.S. economy is improving and on optimism the Chinese economy will avoid a hard landing. Shares on the gauge trade at an average of 0.95 times book value, compared with 2.17 times for the Standard & Poor’s 500 Index. A number less than one means that companies can be bought for less than value of their assets.
Nissan gained 3.1 percent to 790 yen. Fanuc Corp. (6954), a maker of factory robots that gets more than 75 percent of its revenue overseas, rose 1.1 percent to 13,630 yen.
The yen depreciated to as low as 105.05 against the euro today in Tokyo, compared with 103.72 at the close of stock trading yesterday. Against the dollar, Japan’s currency weakened to 80.13 from 79.83. A weaker yen boosts overseas income at Japanese companies when repatriated.
“The yen’s climb, one of the biggest market concerns, has halted, driving gains in exporters’ shares,” said Fumiyuki Nakanishi, a strategist at Tokyo-based SMBC Friend Securities Co.
Futures on the S&P 500 slid 0.1 percent today. The gauge finished little changed yesterday in New York, recovering from a 0.4 percent decline after billionaire investor Warren Buffett said American lenders are in “fine shape,” propelling a rally in banking shares.
Japanese stocks fell yesterday as concern grew that Europe’s commitment to budget cuts as a remedy to the debt crisis may waver after Francois Hollande was elected France’s first Socialist president in almost two decades and Greek anti- bailout parties made a surprisingly strong showing at the polls.
Konami Climbs Back
Konami, which yesterday had the biggest decline on the Nikkei 225, jumped 7.1 percent to 2,024 yen. The stock yesterday plunged on a report the government found that some social-gaming operators used sales systems that violated the law. Nippon Light Metal (5701), an aluminum producer, gained 2.7 percent to 115 yen after tumbling 6.7 percent yesterday on declining metals prices.
“The results of the elections in France and Greece weren’t a surprise. Investors who had expected the results and sold shares are now buying them back,” Shinkin Asset Management’s Fujiwara said.
Fuji Heavy soared 7.3 percent to 602 yen, the biggest gain in the Nikkei 225, after forecasting a 25 percent jump in profit to 48 billion yen ($600 million) this fiscal year as it targets record sales on rising demand in the U.S. and China.
Marubeni, Japan’s biggest grain trading company, advanced 3.8 percent to 550 yen. The trading house is in exclusive talks to buy closely held U.S. grain handler Gavilon Group LLC for about $5 billion including debt, according to a person familiar with the matter.
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