Nikkei rises on strong earnings, but financials drag down Topix

Thu Feb 14, 2013 2:25am EST

* Nikkei up 0.5 percent, Topix down 0.2 percent
    * Financials drag on profit-taking
    * 70 firms have more than 1 trln yen mkt cap - analyst
    * Asahi soars on record profit, share buyback plan

    By Ayai Tomisawa
    TOKYO, Feb 14 (Reuters) - Japan's Nikkei share average
rebounded on Thursday as investors flocked to companies posting
rosy earnings such as brewer Asahi Group Holdings , but
profit-taking in financials limited gains and pulled down the
broader Topix index.
    Analysts said that investors moved cautiously ahead of a
two-day meeting of G20 finance ministers opening Friday due to
concern that the yen's recent sharp fall could be criticised at
the gathering. 
    The Nikkei gained 0.5 percent to 11,307.28. That is
1.7 percent below the 33-month high of 11,498.42 hit on Feb. 6.
    Companies with strong results and improved outlooks
attracted buying. Electronic component maker Taiyo Yuden Co Ltd
 jumped 16 percent after revising its full-year net
profit forecast to 3 billion yen ($32.10 million), compared with
just breaking even. 
    In a note to clients, JPMorgan hiked its profit estimates
for Taiyo Yuden for the next fiscal year and beyond.
    Asahi rose 5.8 percent after the beverage maker
posted record sales and net profit for the year ended Dec. 31
and said it would buy back up to 30 billion yen of its shares,
or 4.3 percent of all its issued stock. 
    Japanese chip-related companies Dainippon Screen
Manufacturing Co Ltd, Advantest Corp and Tokyo
Electron Ltd gained between 3.7 and 7.7 percent after
revenue and earnings forecasts from U.S. counterpart Applied
Materials Inc were largely ahead of analysts' estimates
as smartphones and tablets drive sales. 
    Falls in financial shares caused the broader Topix 
to shed 0.2 percent to 954.88.
    Mitsubishi UFJ Financial Group dropped 1.9 percent,
Mizuho Financial Group skidded 1.9 percent and Sumitomo
Mitsui Financial Group slipped 1.2 percent.
    With the banking sector subindex rising 45
percent since mid-November, it is prone to profit-taking,
traders said.
    On the main board, trading was relatively thin, with 3.66
billion shares changing hands, compared with last week's average
daily volume of 4.65 billion shares.
    On Thursday, the Bank of Japan kept monetary policy steady
as expected. 
    
    GROWING MARKET CAP 
    The Nikkei has gained some 30 percent since mid-November,
while the yen has slumped 15 percent against the dollar during
the same period as Japan's new government has relentlessly
pressure the BOJ for more aggressive policy easing.
    Exporters have led the gains on a weakening yen and on
optimism about Prime Minister Shinzo Abe's commitment to combat
years of deflation and revive growth.
    SMBC Nikko Securities said that 70 companies had market
capitalization of more than 1 trillion yen as of Feb. 13,
compared with 47 in mid-November.
    Keiichi Ito, chief quant analyst at SMBC Nikko Securities,
sees the Japanese market rising in the middle term after there's
clear guidance on how listed companies should fare in the fiscal
year to begin April 1.
    "If the companies' full-year forecasts will rise by 10
percent on an operating basis, the benchmark could hit around
13,000 by the summer," Ito said.
    Market participants said that on top of expectations for
global cyclical exporters to rise, shares that depend on
domestic demand such as banks will also likely gain momentum.
    "I recommend domestic-demand sectors on hopes for the
government's reflationary policy. In particular, bank stocks
will probably make good investments as their main lending
businesses are expected to show growth," said Kyoya Okazawa,
head of global equities at BNP Paribas.
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