Reuters: Market News: Nikkei gains on China data, domestic buying supports

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Nikkei gains on China data, domestic buying supports Apr 2nd 2012, 03:13 Sun Apr 1, 2012 11:13pm EDT * Nikkei up 0.8 pct, Topix gains 0.7 pct * China PMI data lifts index * Blue-chips rally after correction last week * Automakers lifted by BOJ tankan * NGK Insulators sheds 11 pct By Mari Saito TOKYO, April 2 (Reuters) - Japan's Nikkei average looked poised to snap a three-day losing streak on Monday after stronger-than-expected data from China eased worries of an economic hard landing, while buying by domestic investors provided support. Blue-chip shares rallied after a slight market correction last week, with Japan's No.1 investment bank Nomura Holdings Inc jumping 3.6 percent and China-reliant industrial robot maker Fanuc Corp up 2.7 percent. By the midday break, the benchmark Nikkei was up 0.8 percent at 10,163.59, edging closer to the one-year high near 10,255 hit last Tuesday. Fujio Ando, senior managing director at Chibagin Asset Management, said domestic investors were stepping in to buy equities as Monday marked the first trading day of the new financial year. "Investors are buying off the bat ... I think they're shrugging off economic concerns over Europe and China and concentrating on companies that are expected to benefit from Japan's reconstruction, while production by exporters is also recovering from last year's disasters." The softer yen provided support, with the dollar last traded at 83.19 yen, steadying during Asian trading hours after hitting a three-week trough of 81.82 on Friday. "The only factor that is affecting market strength today is this Chinese PMI data and domestic institutional start-of-the-year buying, that's it," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo. China's official PMI (Purchasing Managers' Index) unexpectedly jumped to an 11-month high of 53.1 in March, up from February's 51 and comfortably ahead of forecasts at 50.5, easing recent concern over a hard landing for the world's second-largest economy. Credit Suisse analysts upgraded Japan to "tactically overweight" for the next few months, in a report to clients on Friday, and suggested Japan should outperform by another 12 percent. The broader Topix index climbed 0.7 percent to 860.26 on Monday. Trading on the main board was at 55 percent of its 90-day full day average volume. TANKAN Providing some cause for caution was the closely watched Bank of Japan tankan, which showed major manufacturing sentiment was unchanged in the first quarter, a sign that Japanese manufacturers remained worried about the yen's strength. The headline index for business sentiment was minus 4 in March, lower than the median market forecast for minus 1. Market participants said the bearish tankan was a signal that many big manufacturers may provide conservative earnings guidances for the coming fiscal year, leading some overseas investors to question their bullish allocation in Tokyo equities. "The tankan was unexpectedly cautious ... as we go into an earnings-driven market, I do think the forex rate is not enough to push the index to pre-quake levels near 10,400. For that, we'll need to see U.S. earnings and more details of corporate outlooks," said Masayuki Doshida, senior market analyst at Rakuten Securities. Automakers received a boost from the BOJ survey, however, which showed the sentiment index for big carmakers at plus 28, improving for a third straight quarter, lifted by the waning impact of last year's floods in Thailand and the government's subsidies for fuel-efficient car purchases. Honda Motor Co Ltd, Nissan Motor Co Ltd and Toyota Motor Corp rose between 0.8 and 2.7 percent. Bucking the trend and leading losses on the main board was NGK Insulators Ltd, which shed 11.7 percent after the maker of insulators for power utilities said it would have difficulty supplying NAS batteries -- used for storing power at utilities -- to Tohoku Electric Power Co Inc this summer. Tohoku Electric Power eased 1.4 percent. Link this Share this Digg this Email Reprints

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