Tokyo stocks closed higher on Tuesday as bargain hunters, inspired by robust Japanese growth data, scooped up banks, brokerages and steel makers that were beaten down in the market's recent sell-off.
Stocks with a strong profit outlook such as Citizen Watch Co also lured buyers, while Nippon Telegraph and Telephone Corp (NTT) rose on media reports that the Ministry of Finance would not sell NTT shares on the market this fiscal year.
The Nikkei average rose 1.96 percent to 10,711.09, after losing 3.18 percent on Monday to a three-month closing low.
The broader TOPIX index gained 2.13 percent to close at 1,076.21, bouncing back from Monday's 3.46 percent tumble.
However, analysts remained cautious about the near-term trend, some expecting further stop-loss selling by small investors who had bought shares on margin earlier this year. High oil prices, the prospect of higher US interest rates and global security fears also weighed on the market, they said.
"Investors are still very cautious about foreigners' buying trend, continued selling by foreign hedge funds and the instability of US stocks," said Teruhisa Ishikawa, a manager at Mizuho Investors Securities' investment information department.
Before the opening bell, official data showed gross domestic product (GDP) grew by an annualised 5.6 percent in January-March from the previous quarter, beating a forecast of 3.6 percent and outstripping US growth of 4.2 percent in the same period.
The data also showed that private consumption, the largest part of the economy, grew at a better-than-expected 1.0 percent.
Deflation, a problem for the economy for over four years, is also moderating, although there is no sign of prices rising yet.
Citizen Watch climbed 4.35 percent to 1,055 yen after the company said on Monday that its profit more than tripled in fiscal 2003/04 on strong sales of radio-controlled watches and mobile phone parts, and forecast record earnings again this year.
Japanese telecommunications giant NTT closed up 4.96 percent at 444 yen. The GDP figures helped banks and other stocks that rely on the domestic economy.
Mizuho Financial Group, Japan's biggest banking group, rallied 7.86 percent to 439,000 yen after losing 12.8 percent in the previous three sessions.
Smaller rival UFJ Holdings Inc gained 3.78 percent to 522,000 yen, boosting the banking sector sub-index by 5.35 percent and making it the best performing sector.
Electric furnace steel maker Tokyo Steel Manufacturing Co rallied 10.86 percent to 1,460 yen and Japan's second largest brokerage firm, Daiwa Securities Group Inc, jumped 4.76 percent to 726 yen.
Gainers outnumbered decliners 1,166 to 338. Trading was moderate, with 1.414 billion shares changing hands, down from 1.50 billion shares on Monday.
Comments
Comments are closed.