Sun, May 23, 2004 - Page 10 News List

Japanese stocks advance, TAIEX gains

SPREADING GROWTH Although most of the regional stock indexes advanced for the week on evidence of an economic recovery, Indonesia, the Philippines and China fell


Japanese stocks rose this week, helping the Nikkei 225 Stock Average rebound from a three-month low. Financial companies such as Mizuho Financial Group Inc and T&D Holdings Inc paced gains amid evidence growth in the world's second-largest economy is spreading.

The economy grew more than economists expected in the first three months of the year, advancing for an eighth quarter.

"I'm still confident about the outlook for Japanese stocks when you see this sort of growth momentum," said Hitoshi Yamamoto, who manages US$1 billion in Japanese equities at Commerz International Management (Japan) Ltd in Tokyo.

"This sort of growth can only come with a solid pickup in consumer spending."

The Nikkei climbed 2 percent for the week, while the broader Topix index added 3.1 percent. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 850 stocks in the region, advanced 4.3 percent this week. All three benchmarks snapped three-week losing streaks.

India's Sensitive Index was among Asia's worst-performing stock benchmarks for a second week. Reliance Industries Ltd and Oil & Natural Gas Corp declined after Prime Minister-designate Manmohan Singh, who as finance minister in 1991 to 1996 cut state controls and encouraged foreign investment, said India won't sell stakes in profitable state-owned companies.

In Taiwan, the TAIEX rose for the first week in five amid speculation the government bought equities to support the market before the inauguration this week.

All other benchmarks in the region gained, except for those in Indonesia, the Philippines and China.

In the US yesterday, the Standard & Poor's 500 Index rose 0.4 percent as crude oil fell below US$40 a barrel in response to Saudi Arabia's proposal to boost output, easing concern that higher energy prices will slow consumer spending. The Dow Jones Industrial Average gained 0.3 percent, while the NASDAQ Composite Index advanced 0.8 percent.

In Japan, both the Nikkei and the Topix rebounded from three-month lows at the start off the week.

Both the Topix Banks Index and the Topix Insurance Index climbed 7.4 percent, while the index tracking the performance of non-bank consumer lenders gained 6.8 percent.

For the week, Mizuho, Japan's largest bank by assets, rose 9.5 percent, its biggest advance in almost three months.

T&D Holdings, the nation's fifth-largest life insurer, jumped 8.4 percent. The life insurer said this week full-year profit surged fourfold, prompting Nomura Holdings Inc, Japan's largest brokerage, to raise its rating on the stock.

Aiful Corp, Japan's biggest consumer finance company, gained 13 percent. Nikko Citigroup Ltd, a joint venture between Japan's third-largest brokerage and the world's largest financial services company, recommended investors buy the stock this week.

The Japanese economy grew at a 5.6 percent annual pace in the first three months of the year, a government report showed this week. That compares with a median forecast for a 3.8 percent expansion by 26 economists surveyed by Bloomberg News.

"The numbers were strong and came as a positive surprise," said Takeshi Yamaguchi, who helps manage US$114 billion at Sumitomo Mitsui Asset Management Co in Tokyo. "Evidence of a pickup in consumer spending is making investors go after domestic-related companies with good growth prospects."

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