Japanese Shares Advance as Tech Stocks, SoftBank SurgeAnna Kitanaka
Japanese shares rose a second day, with the Topix index posting its largest advance in two months, as technology companies including SoftBank Corp. surged.
SoftBank soared 8.5 percent after Alibaba Group Holding Ltd., China’s largest e-commerce company, posted its fifth straight quarterly profit gain. SoftBank owns about 37 percent of Alibaba. Yahoo Japan Corp. climbed 4.3 percent. DeNA Co. jumped 12 percent after Credit Suisse Group AG raised the online-gaming company’s rating. J-COM Holdings Co., which provides staff-placement and outsourcing services for mobile-phone companies, slumped 4 percent after cutting its full-year profit outlook.
The Topix added 2.7 percent to 1,166.55 at the close in Tokyo, its biggest advance since Feb. 18. All 33 industry groups rose. The Nikkei 225 Stock Average gained 3 percent to 14,417.68, with no shares on the measure falling. The yen lost 0.4 percent to 102.27 per dollar. Twitter Inc. shares jumped 11 percent yesterday after saying it hired Google Inc. executive Daniel Graf to be its new vice president of consumer products.
“The news about Alibaba and Twitter is giving tech stocks a reason to rebound after a sharp selloff on valuation concerns,” said Tomomi Yamashita, who helps oversee the equivalent of $5 billion at Shinkin Asset Management Co. in Tokyo. “We may see investors buying back shares as we head towards earnings season.”
China’s Alibaba posted a surge in fourth-quarter profit as analysts prepare to raise their valuations ahead of a potential U.S. initial public offering. Net income attributable to ordinary shareholders more than doubled to $1.35 billion in the three months ended December. Alibaba was valued at $153 billion in February, according to the average estimate of 10 analysts compiled by Bloomberg.
Futures on the Standard & Poor’s 500 Index climbed 0.5 percent today after the U.S. gauge advanced 0.7 percent yesterday.
SoftBank surged 8.5 percent to 7,604 yen, the most since June 10. The stock contributed the most to the Topix’s advance and was the second-biggest gainer on the Nikkei 225. Yahoo Japan climbed 4.3 percent to 481 yen.
DeNA surged 12 percent to 1,827 yen after Credit Suisse raised its investment rating to outperform, saying profit downside looks limited. KLab Inc., another provider of online games, soared 18 percent to 645 yen. The company’s “Love Live! School Idol Festival” is the top-grossing application for Apple Inc.’s iPad and No. 4 for the iPhone, according to data from App Annie Ltd.
Finance Minister Taro Aso suggested Japan’s 128.6 trillion yen ($1.26 trillion) Government Pension Investment Fund may change its portfolio allocation in June or later. GPIF is facing pressure to reduce its 60 percent target holding for domestic bonds and increase risk assets such as stocks and alternative investments.
“Once those movements are clear, there is a high chance that foreign investors will react,” Aso said.
Japan’s government may downgrade its economic assessment for the first time since November 2012 amid a drop in consumption after this month’s sales-tax increase, the Nikkei newspaper reported, without citing anyone.
Data today showed China’s economic expansion slowed to the weakest pace in six quarters, testing leaders’ commitment to keep reining in a credit boom and pollution as risks mount that the world’s second-biggest economy will miss its 7.5 percent annual growth target.
Gross domestic product rose 7.4 percent in the January-to-March period from a year earlier, the National Bureau of Statistics said, compared with the 7.3 percent median estimate in a Bloomberg News survey of analysts. Growth slowed from 7.7 percent in the three months through December.
“The trend for China’s economic growth is to slow down,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which manages the equivalent of $474 billion. “Japanese shares are rebounding from recent declines because of the yen and U.S. share gains, while Alibaba is supporting technology companies.
Among shares that fell, J-COM lost 4 percent to 717 yen. The company cut its net-income forecast by 77 percent for the year ending May 31. It also reduced its operating-profit outlook by 76 percent.
The Topix tumbled 6.7 percent last week to extend its 2014 decline to 13 percent, the steepest among 24 developed markets tracked by Bloomberg. The Japanese measure’s 14-day relative strength index dropped to 33 on April 14, near the 30 threshold some traders view as a signal the index has dropped too far.
‘‘The Nikkei 225 and the Topix were at levels that are oversold and are in a buying zone,’’ said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc.