Roundup: Nikkei gains 0.53 pct on subsiding Greece concerns, U.S. data

10:49, July 02, 2011      

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Tokyo stocks ended higher Friday, with the key Nikkei stock index rising 0.53 percent on upbeat U.S. macroeconomic data and subsiding fears about Greece's debt woes.

Brokers in Tokyo said that investor sentiment was lifted by a better-than-expected report in the U.S. manufacturing sector that helped lift Wall Street overnight.

The Institute for Supply Management's Chicago Purchasing Manager's Index increased more than expected in June, hitting 61.1 from a reading of 56.6 in May.

In addition, markets cheered data from the U.S. Labor Department showing that the number of people applying for unemployment benefits dropped by 1,000 to 428,000 in the week ending June 25 -- less than median market expectations, traders here said.

Also adding support and sending the Nikkei to its highest closing level in two-months, with the index momentarily topping the 9,900 threshold, was increased optimism that Greece will avoid a massive default on its debt, following the passing of drastic austerity measures through Greece's parliament the previous day.

"Investors are feeling more optimistic after Greece passed its austerity package," said Kiyoshi Ishigane, a senior strategist in Tokyo at Mitsubishi UFJ Asset Management Co.

"There's also less concern that the U.S. economy is in trouble. Manufacturing should stop falling as supply chains in Japan are recovering quickly."

The 225-issue Nikkei Stock Average gained 51.98 points from Thursday to 9,868.07, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange rose 4.64 points, or 0. 55 percent, to close at 853.86.

With the yen depreciating to 117.21 against its European counterpart and dropping to 80.89 against the U.S. dollar, exporters finished the week on a high note as profits aren't diminished when repatriated and products and services are more competitive in international markets.

Added to this, a report by the Bank of Japan (BOJ) released before the morning session showed that big companies in both the manufacturing and non-manufacturing sectors plan to increase capital investment by 4.2 percent in fiscal 2011, accelerating away from a 0.4 percent projection proffered in the previous government survey.

In addition, the central bank's Tankan survey showed that large manufacturers expect conditions to improve over the next three months with the index for September seen at plus 2, slightly below median market expectations for a reading of plus 3.

Subsequently, large-cap firms like industrial robotics maker Fanuc climbed 3.1 percent to 14,110 yen and was the Nikkei's biggest gainer on Friday and the world's largest automaker Toyota Motor gained 1.1 percent to 3,335 yen.

Nissan Motor rose 1.0 percent to 850 yen and consumer electronics giant Sony Corp. closed up 0.5 percent, also elevated by the BOJ's Tankan survey outlook.

Tokyo Electric Power Co., also known as TEPCO, added 0.6 percent to 328 yen, boosted by the installation of a water circulation system to cool spent nuclear pools at its troubled Fukushima No. 1 power plant, central to an ongoing nuclear crisis in northeastern Japan.

Makers of gas appliances gained on the last trading day of the week, as the government kicked off its electricity conservation campaign and hence Rinnai climbed 1.6 percent to 5,890 yen and industry rival Noritz surged 6.4 percent to finish at 1,572 yen.

Trading volume on Friday dropped to 1.67 billion shares on the Tokyo Exchange's First Section, falling from Thursday's volume of 1.90 billion shares, with rising stocks beating falling ones by 884 to 615.

Source: Xinhua

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