Japan stocks rose, led by property developers, after Barclays Plc gave the industry a “positive” recommendation. Companies that generate most of their revenue domestically climbed as investors shied away from global risk.
Mitsubishi Estate Co., Japan’s biggest property developer by market value, surged 4.4 percent after Barclays gave the company its top “overweight” rating.Nomura Holdings Inc., Japan’s largest brokerage, advanced 2.8 percent after the Nikkei said investment-banking revenue is rebounding at brokerages. NEC Corp., Japan’s largest personal-computer maker, plunged 8.9 percent after the Yomiuri newspaper said it will raise capital.
The Nikkei 225 Stock Average added 51.16, or 0.6 percent, to 9,395.32 at the close of trading in Tokyo. The broader Topix index gained 6.04, or 0.7 percent, to 878.29.
“Investors are not interested in taking on risk at the moment, which is why defensive, domestic stocks are getting a second look,” said Tomomi Yamashita, a Tokyo-based fund manager at Shinkin Asset Management Co., which oversees about $5.5 billion.
Trading was light, with a total value of 1.02 trillion yen ($10.9 billion) for the main board of the Tokyo bourse, the lowest level since Feb. 17. Japan’s market will be closed on July 20 for a holiday.
Comments from New York University professor Nouriel Roubini that the recession will end this year helped propel U.S. shares higher in the final hours of trading yesterday. The economist later said in a statement that his quotes were taken out of context and don’t accurately reflect his bearish view.
Roubini Comments
“I see instead a shallow, below-par and below-trend recovery,” Roubini said in a statement on his Web site.
For the week, the Nikkei has gained 1.1 percent, while the Topix added 0.6 percent. Both measures were headed for their first weekly climb this month.
In New York, the Standard & Poor’s 500 Index reversed a loss of as much as 0.6 percent to finish 0.9 percent higher. International Business Machines Corp., the world’s biggest computer-services provider, led gains prior to announcing an increase to its full-year earnings forecast on improving profit margins. The statement was made after markets closed.
Mitsubishi Estate jumped 4.4 percent to 1,478 yen, the steepest rise in three weeks. NTT Urban Development Co., which manages properties for Japan’s former phone monopoly, added 6.1 percent to 90,900 yen. Sumitomo Realty & Development Co., the country’s No. 3 developer, climbed 4.1 percent to 1,646 yen. A measure of real estate companies had the biggest gain on the Topix.
Brokers Gain
Takashi Hashimoto, an analyst at Barclays in Tokyo, assigned “overweight” recommendations to all three companies in new coverage.
“Money has started flowing in capital markets again, overseas investors are returning to Japanese property and real estate investment trusts are raising funds and on the recovery path,” Hashimoto said by phone today. “The news flow on property is set to be positive for the time being.”
Nomura rose 2.8 percent to 734 yen. Daiwa Securities Group Inc., Japan’s second-largest brokerage, advanced 3 percent to 520 yen. Investment banking commissions in Japan rose 90 percent in the latest quarter, the Nikkei reported today, citing research firm Dealogic.
Retail and telecommunications companies that generate their sales within Japan also climbed. Aeon Co., Japan’s second- largest retailer, rose 2.9 percent, while KDDI Corp., the No. 2 mobile-phone operator, surged 4.2 percent. Aeon shares have lost 5.3 percent this year, and KDDI is down 18 percent, compared with a 2.2 percent gain by the Topix.
NEC, Sony
“The mood of the market has been moving to a more optimistic bent, bringing funds into risk assets, and laggard domestic economy stocks are now being bought as a result,” said Isao Kubo, a stocks strategist at Nissay Asset Management Co. which oversees $52 billion in Tokyo.
NEC plunged 8.9 percent to 288 yen after the Yomiuri newspaper said the company may raise as much as 150 billion yen in new capital to invest in lithium battery production.
Sony Corp., the maker of the PSP portable game console, Vaio computers, and Cyber-shot digital cameras, lost 0.9 percent to 2,265 yen. The company’s mobile-phone joint venture with Ericsson AB posted a 213 million euro ($300 million) net loss for last quarter as demand weakened.
Sony and Nintendo Co., the maker of Wii game consoles, also dropped as total U.S. revenue from gaming hardware, software and accessories tumbled 31 percent. Nintendo declined 1.2 percent to 25,630 yen.
