Nikkei up on bargain hunting as China data awaited
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Nikkei up on bargain hunting as China data awaited

Last Updated: Tuesday, August 23, 2011, 08:50
 
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Nikkei up on bargain hunting as China data awaited

Tokyo: The Nikkei average rose on Tuesday on broad-based bargain hunting after sliding the previous day to its lowest close in five months, although concerns about the economies of key export markets and the impact of yen strength kept gains in check.

The benchmark Nikkei was up 0.6 percent at 8,679.87. The broader Topix index rose 0.8 percent to 748.92.

"Domestic demand-related issues will continue to outperform, although the market isn't trading so much on Japanese fundamentals lately," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Investors awaited the release of a preliminary gauge of China's purchasing managers index (PMI) compiled by HSBC, expected after the end of morning trading.

While the specter of another US recession has been the main worry haunting Tokyo investors in recent sessions, China is also a key market for Japanese companies such as Toshiba Corp.

Toshiba's shares were up 1.9 percent at 315 yen after the Nikkei business daily reported the firm would increase production of industrial motors to five times the current level by 2015 for the Chinese market.

"If the China PMI surprises on the downside it could pressure Japanese stocks," said Kenichi Hirano, operating officer at Tachibana Securities.

Stock investors also continued to warily track foreign exchange markets and expect authorities to take action to stem any sharp rise in the yen. The dollar was trading in a narrow range just under 77 yen on Tuesday.

On Monday, US stocks ended slightly higher after four weeks of losses, while Brent crude prices slipped on prospects that Libya's civil war will soon end, meaning a resumption of oil exports from the north African country.

Investors also continued to await Federal Reserve Chairman Ben Bernanke's speech on August 26 at the central bank's annual gathering in Jackson Hole, Wyoming, for hints on any further US easing.

The Nikkei marked its lowest close on Monday since March 15 on worries about the US economy. The broader Topix index .TOPX lost 1.2 percent to 742.84.

On Tuesday, shares of Toyota Motor Corp added 1.2 percent to 2,732 yen, after the auto maker and Ford Motor Co said that they would work together to develop hybrid trucks and SUVs that will be ready for market by the end of the decade, and collaborate on other products.

Chubu Electric Power Co added 2.7 percent to 1,498 yen, after the Nikkei business daily reported that the Japan Bank for International Cooperation would provide a 100 billion yen (USD 1.30 billion) low-interest loan to the utility as early as this week to finance purchases of liquefied natural gas.

Bureau Report




First Published: Tuesday, August 23, 2011, 08:50


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