Japanese stocks rose this week, led by brokerages such as Nomura Holdings Inc, after Daiwa Securities Group Inc posted its first profit in three quarters on increased equity trading and sales of foreign-currency bonds.
"Huge trading volumes have been benefiting most brokerages," said Katsuaki Furutachi, who helps manage the equivalent of US$3.4 billion at Asahi Life Asset Management Co in Tokyo. "The market seems to be on an upward trend and it will continue to boost their profitability."
The Nikkei 225 Stock Average gained 1.3 percent for the week to 9648.01, rising for the third week in four.
The Topix index advanced 1.3 percent to 945.28. Computer-chip makers such as Toshiba Corp and NEC Corp gained after sales forecasts by Texas Instruments Inc prompted Lehman Brothers Holdings Inc to recommend buying semiconductor stocks.
South Korea's Kospi index gained 0.8 percent to 705.09 this week, led by Posco. The world's fourth-largest steelmaker surged after its board decided to increase dividend payments and cancel some stock.
In Taiwan, the TWSE index ended the week 2 percent higher at 5394.75. Hon Hai Precision Industry Co and other companies with Chinese factories led gains on a Chinese-language newspaper report the Beijing government proposed a free-trade agreement with Taipei.
Elsewhere in Asia, Hong Kong's Hang Seng Index fell 2 percent to 9939.20. China Mobile (HK) Ltd and other telecommunications companies led the drop after Credit Suisse First Boston cut its rating on Motorola Inc, sparking concern about industry growth.
In the US yesterday, stocks rallied as the biggest gain in durable goods orders since January buoyed optimism economic growth will prolong the market's rally. Cummins Inc, the world's largest maker of high-powered diesel engines, led the advance after its quarterly profit unexpectedly increased.
The Standard & Poor's 500 Index added 17.08, or 1.7 percent, to 998.68, for the biggest gain in almost three weeks.
All 30 stocks in the Dow Jones Industrial Average rose as the benchmark had its biggest jump in almost six weeks.
The Dow rose 172.06, or 1.9 percent, to 9284.57. The NASDAQ Composite Index gained 29.28, or 1.7 percent, to 1730.70 Nomura Holdings Inc, Japan's largest brokerage, advanced 4.6 percent to Japanese Yen 1,650 this week. Nomura will report earnings on Thursday. Daiwa Securities gained 3.7 percent to Japanese Yen 709.
Daiwa Securities, Japan's second-largest brokerage by sales, almost doubled its first-quarter profit as a 14 percent gain in the quarter for the Nikkei boosted trading activity.
Profit also rose as Japanese investors bought Japanese Yen 7 trillion more overseas bonds than they sold in April and May, more than double their net purchases a year earlier.
Nikko Cordial Corp, Japan's third-largest brokerage, gained 4.2 percent to Japanese Yen 527. Nikko said yesterday that first-quarter profit rose threefold, boosted by bond trading and a doubling of the firm's stock underwriting fees.
Semiconductor-related shares rose, pacing gains on the Nikkei and Topix. Toshiba, the world's third-largest chipmaker by sales, rose 7.8 percent to Japanese Yen 485. NEC, the world's sixth-largest chipmaker, jumped 8.6 percent to Japanese Yen 783.
The shares gained after Texas Instruments Inc, whose chips powered half the mobile phones sold last year, said sales this quarter may rise by 11 percent. Daniel Niles and Joseph To, analysts at Lehman, raised their rating on the stock.
Posco jumped 9 percent this week to 140,000 won after its board decided on Wednesday to raise dividends and cancel 21 percent of the company's shares.
The steelmaker said Thursday that profit tripled in the second quarter to its highest in three years because of rising demand from builders and carmakers in South Korea and China.
Kookmin Bank, the nation's largest lender, gained 5.5 percent to 42,000 won this week on optimism earnings may improve in the second half as fewer people default on credit-card payments.
South Korea's Financial Supervisory Service said in a report that the combined ratio of payments overdue for more than a month at the nation's nine major credit-card companies declined to 9.7 percent in June from a record 11.7 percent in May.
Taiwan, Hong Kong
Companies in Taiwan with business links to China advanced after a Chinese-language newspaper reported over the weekend that China's government proposed a free-trade accord with Taiwan. Under the free-trade agreement, businesses in Taiwan will find it easier to start up businesses in China.
Hon Hai Precision, a computer-cable connector maker with factories in China, gained 8.1 percent to NT$161 this week.
Quanta Computer Inc, which makes notebook computers near Shanghai for clients such as the US-based Dell Inc, jumped 11 percent to NT$87.5.
China Mobile, China's biggest mobile-phone company, fell 6 percent to HK$19.75. China Unicom Ltd, Hong Kong's No. 2 cell-phone company, ended the week 5.3 percent lower at HK$5.35.
The shares fell after Tim Long, an analyst at Credit Suisse First Boston, cut his rating to "underperform" from "neutral" on Motorola, the world's second-largest maker of mobile phones, saying the company may not meet this year's earnings estimates.