Nikkei hits 6-month high on earnings hopes

Tags: Stock Market
Japan's Nikkei average rose to six-month highs on Monday, and looked poised to test key resistance levels around 15,500 points, on hopes of continued improvement in corporate earnings.

By the middday break, the benchmark Nikkei was up 0.5% at 15,530.29, its highest level since Jan. 23, reversing early losses that followed Friday's weakness on Wall Street.

Still, the index is down 4.7% since the start of this year following a record-breaking 57% rally in 2013, buoyed by Tokyo's aggressive stimulus policies.

This week will mark the first peak week of the April-June quarter earnings season. Nissan Motor Co Ltd will be the highlight when it reports its results later in the day.

Nissan rose 0.2%, Toyota Motor Corp added 0.7%, and Fuji Heavy Industries Ltd - which makes Subaru cars - climbed 0.7%.

"Strong results from automakers could help the Nikkei rise above resistance of around 15,500, and quickly push toward 16,000, possibly by the end of August," said Ryota Sakagami, chief equity strategist at SMBC Nikko Securities.

Since mid-June, the Nikkei has had a few unsuccessful attempts to rise above the 15,500 level.

Traders say a cluster of barrier options, which are related to equity-linked bonds, are one of the reasons why the benchmark has not been able to rise above that level.

"There are some potential signs of encouragement for the rally to resume once we get through the uncertainties of first quarter earnings," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo.

Casino-related stocks, such as Konami Corp and Fuji Media Holdings Inc, benefited from a report by the Nikkei paper that casino openings in Japan could come before the 2020 Summer Olympics.

Konami, which has expressed interest in operating casinos in Japan, added 1.9%, while Japan Cash Machine Co Ltd, a maker of coin-counting terminals used in casinos, jumped 5.3%.

Pachinko machine maker Universal Entertainment Corp gained 2.5% and Fuji Media, a broadcaster headquartered in a section of Tokyo considered prime location for casino development, climbed 3.1%.

Among big market caps, NTT DoCoMo gained 2.2% to a 6-1/2-year high after it reported a fall in contract cancellation in the three months to June.

The broader Topix advanced 0.4% to 1,286.74, while the JPX-Nikkei Index 400 also rose 0.4% to 11,717.03.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • E-auction and eventual privatisation of coal industry are welcome steps

    The government’s decision to privatise the scam-ridden coal industry through a presidential ordinance will eventually end the monopoly of public sec

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Rajgopal Nidamboor

Synchronous balance is vital for one and all

Imagine that you are playing an electronic game, or actually ...

Shona Adhikari

When women to birds become a painter’s muses

This week the focus is on renowned artist Amitabha Banerjee, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture