Topix Index Extends 4 1/2-Year High as Insurers Advance

Japan’s Topix Index advanced for a second day to its highest since September 2008 as NGK Spark Plug Co. and Tokio Marine Holdings Inc. climbed on earnings and China’s export growth unexpectedly accelerated.

Tokio Marine jumped 4.7 percent after the casualty insurer beat analysts’ profit estimates. NGK Spark Plug rose 7.1 percent after forecasting operating profit that topped estimates. Hitachi Construction Machinery Co., which gets 16 percent of sales in China, advanced 5.6 percent. Sharp Corp. surged 6.3 percent after media reports the unprofitable TV maker will get an increased credit line from lenders and supply screens for Apple Inc.’s new iPhone.

The Topix added 0.5 percent to close at 1,194.34 in Tokyo, with nine stocks rising for every seven that fell. The gauge yesterday gained 3.1 percent, the most in a month, to recoup losses from the 2008 collapse of Lehman Brothers Holdings Inc. The Nikkei 225 Stock Average rose 0.7 percent to 14,285.69 today.

“China’s trade data is giving an extra boost to the market because nobody expected much,” said Takashi Ito, an equity strategist at Nomura Securities Co., Japan’s biggest brokerage. “You can’t deny that overall earnings results have been good.”

Of the 339 companies on the Topix that have reported full-year earnings since April 1, and for which Bloomberg has estimates, 197 beat analysts’ projections. Sony Corp. and Takeda Pharmaceutical Co. are among more than 600 companies on the measure scheduled to post results in the next three days, according to data compiled by Bloomberg.

Japan’s broadest share gauge rallied 65 percent since mid-November, making it the world’s best-performing major stock index, amid optimism Prime Minister Shinzo Abe will beat deflation. The Topix yesterday traded at 1.3 times book value, compared with 2.4 for the Standard & Poor’s 500 Index and 1.7 for the Stoxx Europe 600 Index.

NGK Rises

A gauge of glass and ceramic makers rose the most among the Topix’s 33 industry groups, as NGK Spark Plug forecast full-year operating profit would increase 60 percent to 38 billion yen ($387 million), higher than the average analyst estimate of 33.3 billion yen. Shares of the supplier to Toyota Motor Corp. climbed 7.1 percent to 1,759 yen.

Toyota, reporting results after the market’s close, forecast annual profit below estimates amid slumping demand in China. Net income may increase 42 percent to 1.37 trillion yen, lagging behind the 1.42 trillion yen average of analyst projections compiled by Bloomberg. The stock added 1.4 percent to 5,840 yen today.

Insurers Gain

Insurers had the second-biggest gain among Topix subgroups. Tokio Marine advanced 4.7 percent to 3,250 yen after reporting net income of 129 billion yen, beating the average analyst estimate of 114 billion yen, citing gains on shareholdings and improved overseas businesses.

Dai-Ichi Life Insurance Co., Japan’s second-biggest insurer, rose 1.6 percent to 133,400 yen. T&D Holdings Inc., a life insurer, gained 1.7 percent to 1,144 yen.

Japanese shares also climbed after China’s exports rose 14.7 percent, above the 9.2 percent median forecast of analysts surveyed by Bloomberg News. Imports advanced 16.8 percent, while the trade surplus of $18.2 billion was higher than projected.

Komatsu Ltd., a construction machinery maker that depends on China for almost 10 percent of its sales, rose 4.4 percent to 2,728 yen. Hitachi Construction climbed 5.6 percent to 2,425 yen.

Rakuten Inc. soared 11 percent to 1,257 yen, the highest since December 2004, after Deutsche Bank AG recommended buying the shares of the online shopping site. The bank said a shift to domestic demand from exports will boost Rakuten’s presence. Sharp advanced 6.3 percent to 369 yen after the Nikkei reported the display maker will get a credit line of 150 billion yen from lenders. The company will make screens for the iPhone starting next month, the Nikkan Kogyo newspaper said.

The Nikkei Stock Average Volatility Index rose 4.1 percent to 25.77, indicating traders expect a swing of about 7.4 percent on the benchmark gauge during the next 30 days.

Futures of the S&P 500 were little changed today. The measure yesterday extended its record level for a fourth straight day, and the Dow Jones Industrial Average closed above 15,000 for the first time.