Nikkei gains 2 pct on euro zone deal
TOKYO |
TOKYO (Reuters) – The Nikkei share average climbed 2 percent to close above 8,900 for the first time since early September after policymakers reached a deal to contain the euro zone crisis, helping the market shake off gloom brought on by a yen near record highs.
Shares of scandal-hit Olympus Corp soared 23 percent as short-sellers scurried to cover positions when prices started rising after its chairman said he would resign.
But investors pronounced themselves less than satisfied with a news briefing in which the company defended its contentious acquisition deals.
The Bank of Japan’s move to further ease policy by buying more assets also lifted sentiment, although the central bank stopped short of saying it would increase its buying of Japanese stocks through exchange-traded funds (ETFs).
Euro zone leaders struck a deal on Thursday with private banks and insurers to accept a 50 percent loss on holdings of Greek government bonds as part of a plan to lower Greece’s debt burden.
While investors in Tokyo bought shares so they wouldn’t be left behind in a global rally, many here were cautious about how long the relief rally would last.
“There are still many unknowns about Europe, and there now seems to be greater potential for something to happen there that will disappoint investors, rather than for positive surprises,” said Tomomi Yamashita, fund manager at Shinkin Asset Management Co.
The Nikkei finished up 2 percent at 8,926.54, while the broader Topix index gained 2.2 percent to 762.79.
U.S. stock futures also rose, with SP 500 e-mini futures last up 19 points, or 1.5 percent, at 12,56.50.
Japanese bank shares, which had edged lower in early trading, jumped after news of the euro zone deal, with Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group both adding more than 5 percent.
More than 4 shares rose for each one that declined on the main board. Trading volume was relatively thin but above recent averages, with 1.81 billion shares changing hands, up from 1.46 billion shares on Wednesday. It was the highest volume since Oct 5, when 2.07 billion shares traded.
Even with Thursday’s gain, Olympus shares are still down 45 percent – wiping out more than 300 billion yen of market capitalization – since Oct 13, the day before the company fired its chief executive who questioned the hefty fees paid to financial advisers in the MA deals.
“The company’s problems were matters of disclosure and corporate governance, so even after it said it has revealed everything, I don’t think anyone was convinced that they have, and questions remain,” said Fujio Ando, senior managing director at Chibagin Asset Management.
But worries remained that the yen’s strength could hurt Japanese manufacturers, many of which are also suffering from supply chain disruptions due to floods in Thailand.
The yen hit a record high of 75.71 yen against the dollar on Wednesday.
Highlighting the plight of exporters, Nippon Electric Glass, which earns 70 percent of its revenue overseas, plunged 7.1 percent to 758 yen, after it said on Wednesday that its first-half net profit fell 42 percent due to weak sales of glass for flat-panel displays.
(Additional reporting by Hideyuki Sano; Editing by Edwina Gibbs)
Article source: http://feeds.reuters.com/~r/reuters/INbusinessNews/~3/M1fZZL95NNk/idINIndia-60149220111027
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