Nikkei rises on earnings hopes; retail buying lifts smaller bourses

Mon Jan 20, 2014 9:33pm EST

* Both foreign, retail investors' buying lift markets
    * Nintendo extends slide after loss forecast

    By Ayai Tomisawa
    TOKYO, Jan 21 (Reuters) - The Nikkei average rose more than
1 percent on Tuesday morning after three days of losses, as
investors bought back stocks on expectations that Japanese
corporate earnings will be strong.
    A weaker yen, always a key catalyst for the Japanese market,
also supported sentiment and lifted currency-sensitive exporters
like Toyota Motor Corp.
    The Nikkei was up 1.4 percent at 15,853.04 in
midmorning trade after falling 0.3 percent to a one-week closing
low on Monday. The index recovered its 25-day moving average of
15,758.47.
    Analysts said buying from both foreigners and retail
investors buoyed the market, with foreign brokers placing net
buy orders for a fifth day before the open. With the
third-quarter earnings season just around the corner, investors
are hopeful the market may see more rises in the next few weeks,
they added.
    "Investors are interested in companies which are expected to
raise their annual forecasts and firms with good ROE," said
Hikaru Sato, a senior technical analyst at Daiwa Securities.
    Junior bourses, where many small- to mid-cap shares are
listed, also benefited from retail investors' buying, rising to
multiyear highs.
    The Jasdaq Securities Exchange rose 0.2 percent to
2,183.17, its highest since March 2007, and the second section
of the Tokyo Stock Exchange gained 0.1 percent to
3,824.07, its highest since August 2007.
    "NISA is helping retail investors' interest in attractive
shares," said Sato, referring to tax-free Nippon Individual
Savings Accounts, a new scheme aimed at driving massive Japanese
savings into stocks and mutual funds.
    The broader Topix added 0.7 percent to 1,302.31.
    Rakuten Inc, which operates an online-shopping
site, rose 3.5 percent to 1,843 yen, its highest since at least
2000, according to Thomson Reuters data.
    Exporters were in demand as the dollar edged up to 104.16
yen from 103.865 yen. Toyota Motor gained 1.6 percent and
Tokyo Electron Ltd added 1 percent. 
    But Nintendo Co dropped 3.1 percent and was the
most traded stock by turnover, extending its slide from the day
before as investors worried about its loss forecast. On Monday,
Nintendo fell as much as 18 percent before ending 6.2 percent
lower. 
    "Those who are selling today include long-term investors who
don't want to own Nintendo until the management comes up with a
hopeful strategy," said a fund manager at a Japanese asset
management firm.
    Panasonic Corp dropped 1.1 percent after Citigroup
cut its rating to "sell" from "buy", citing likely lower profit
growth in the foreseeable future due partly to its planned
impairment losses from the company's recent restructuring.
    The JPX-Nikkei Index 400, a recently introduced
gauge comprised of firms with high return on equity and strong
corporate governance, rose 0.8 percent to 11,764.10.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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