Nikkei gains 0.85 pct on eased Greek concerns, oil price fall

13:42, June 25, 2011      

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Tokyo stocks rose Friday, with the key Nikkei stock index adding 0.85 percent, as Greece nearing conditions required for a bailout helped ease concerns about debt contagion in the single currency region and a fall in oil prices helped ease fears about the global economic recovery and gave Japanese shipping lines a boost.

Local brokers said that investors were heartened by Greece winning the backing of international lenders on Thursday for a five-year austerity plan, which has been created to stave off a potentially crippling national bankruptcy.

Greek Prime Minister George Papandreou vowed to promote tough fiscal reforms in parliament, including slashing spending and adding more tax hikes. It's imperative that parliament passes the new austerity bills at a vote next week.

"Investors are feeling more willing to take on risk," said Ayako Sera, a strategist at Sumitomo Trust &Banking Co.

"Greece has cleared the minimum requirement for the next loan, but the final hurdle, parliament's approval of the austerity programs, still remains," she said.

Other analysts noted that while the latest Greece news had little effect on the euro, it had worked to settle global markets for the time being and fears about debt contagion in the region have receded, strategists said.

"Although the euro's exchange rate has remained almost unaffected, there are hopes among investors that the Greece debt problems will calm for a while," said Takashi Hiroki, chief strategist at Monex Inc.

The 225-issue Nikkei Stock Average gained 81.97 points, or 0.85 percent, from Thursday to 9,678.71, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange gained 7. 69 points, or 0.93 percent, to finish the week at 833.20.

Euro-sensitive export-related issues found favor today as Greece looks increasingly like it won't default. Sony climbed 2.4 percent to 2,077 yen and Mitsubishi UFJ Morgan Stanley Securities raised its rating on the consumer electronic giant's stock to " outperform" from "neutral," citing its efforts to cut procurement costs.

Electronic component maker TDK Corp. rose 1.7 percent to 4,500 yen and Toshiba jumped 4.9 percent after an analyst at Mitsubishi UFJ Morgan Stanley Securities upgrading his rating on the stock to "outperform" from "neutral."

Automakers added to recent gains on renewed hope that supply chain disruptions in the wake of the March 11 twin disasters will be overcome at a quicker pace than previously expected.

Toyota Motor gained 1.1 percent to 3,285 yen and Honda Motor rose 1.2 percent to 3,000 yen. Nissan edged up 0.6 percent to 844 yen, while Suzuki climbed 0.7 percent to finish at 1,769 yen.

Oil prices dropping to a four-month low following the release of emergency reserves by the world's largest economies gave Japanese shipping lines a boost and analysts said markets are hoping to see a reduction in looming fuel prices, in the United States particularly.

Nippon Yusen climbed 2.0 percent, to 301 yen and rival Mitsui O. S.K. Lines advanced 3.2 percent to 417 yen.

But some oil-related issues failed to capitalize on early gains with Idemitsu Kosan finally losing 1.1 percent to 8,330 yen.

Among power companies in the spotlight on the final trading day of the week, Chubu Electric Power gained 1.9 percent to 1,474 yen, following a report in the Nikkei saying that the government will lend 100 billion yen to the company through the Development Bank of Japan later this month under an emergency response loan program designed to help companies hit by the March 11 disaster.

Trading volume on Friday rose to 1.76 billion shares on the Tokyo Exchange's First Section, up from Thursday's volume of 1.72 billion shares, with rising stocks beating falling ones by 1,144 to 406.

Source: Xinhua
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