Japan's Nikkei average rose 0.23 percent to its highest level in nearly five years on Thursday, extending its rally into a sixth session, as chip-related shares gained on optimism about the industry's outlook.
Shares of Teikoku Oil Co Ltd jumped on speculation that Japan's top oil refiner Nippon Oil Corp may join Teikoku's planned merger with INPEX Corp, while property and bank shares sagged, pushing down the broad TOPIX index.
Soichiro Monji, a strategist at Daiwa SB Investments, said buying technology stocks is a natural move considering their improving profitability.
"Technology companies have streamlined their operations by scaling down unprofitable businesses and focusing on profitable ones, which has led strong earnings," Monji said.
Monji also said the market may be taking a breather ahead of December, a month when US and Japanese stocks traditionally perform well.
"December is a bonus season in Japan and money tends to flow into the market via investment trust funds," Monji said.
US stocks too are expected to fare well next month, Monji said, adding that in eight out of past 10 years they have risen in December, helping Japanese technology exporters.
The tech-sensitive Nikkei finished up 34.26 points at 14,742.58, its highest closing since December 14, 2000. It was its sixth straight advance, the longest rally since June. The TOPIX fell 0.58 percent to 1,517.64, posting losses for third straight session after booking a five-year high last Friday.
Japan's second-largest lender, Mizuho Financial Group Inc, fell 1.3 percent to 820,000 yen and Sumitomo Mitsui Financial Group Inc was down 1.8 percent at 1.1 million yen. Both posted strong earnings this week.
Japan's largest bank, Mitsubishi UFJ Financial Group, was down 1.3 percent at 1.49 million yen ahead of its half-year earnings announcement later on Thursday.
Property stocks also came under profit-taking pressure with No 1 developer Mitsui Fudosan Co Ltd losing 4 percent to 1,930 yen.
In the energy sector, Nippon Oil gained 3.2 percent to 901 yen after it said on Tuesday it had raised its stake in oil explorer Teikoku Oil, which is set to be taken over by rival Inpex. The move raised speculation that Nippon Oil may join in the planned merger of Teikoku and INPEX.
Teikoku jumped 6.9 percent to 1,390 yen while INPEX added 4.1 percent to 896,000 yen.
Advantest Corp, the world's largest maker of microchip-testing devices, surged 10 percent to a three-year high of 10,870 yen, while Tokyo Electron Ltd, the world's second-largest producer of chip-making tools, leapt 6.1 percent to 7,310 yen after hitting near two-year highs.
Rises in those two stocks alone contributed more than 50 percent of the Nikkei's gain, and Masayoshi Okamoto, head of dealing at Jujiya Securities, said such gains could be erased as quickly as they were made.
Trade activity was slow, with 2.32 billion shares changing hands on the Tokyo exchange's first section, well below the record level of 4.56 billion shares hit two weeks ago.
Decliners beat out advancers 1,116 to 469.
Comments
Comments are closed.