Nikkei climbs to 2-week high on banks, component makers

Wed Jan 22, 2014 8:39pm EST

* Nidec, Japan Aviation jump after quarterly results
    * Banks in demand as investors seek underperformers

    By Dominic Lau
    TOKYO, Jan 23 (Reuters) - Japan's Nikkei stock average
advanced to a two-week high on Thursday, helped by gains in
electronics component makers after strong results from Nidec,
while some investors sought underperformers in the banking
sector.
    The Nikkei was up 0.7 percent at 15,925.51 after
rising as high as 15,958.58 - edging closer to the 16,000 mark
it had crossed last month for the first time in six years.
    Still, the benchmark has so far got off to a slow start this
year after rallying 57 percent in 2013, its best annual
performance since 1972 on the back of Japan's massive fiscal and
monetary stimulus.
    Nidec Corp climbed 3.9 percent after the precision
motor maker lifted its operating profit estimate for the year
ending March by 6.3 percent to 85 billion yen ($815 million) and
its annual dividend forecast by 11 percent to 100 yen per share.
    It also announced a plan to buy back up to 24 billion yen
worth of its own shares, equivalent to 1.45 percent of its
outstanding stock, between Jan. 27, 2014 and Jan. 26, 2015.
    Japan Aviation Electronics Industry Ltd, an Apple
Inc supplier, surged 12.6 percent after it raised its annual
earnings forecast for the second time this fiscal year, by 18
percent to 14.8 billion yen, on the back of
stronger-than-expected sales of telecommunications and
automotive connectors.
    According to Thomson Reuters StarMine, Japan Aviation
Electronics shares were still 17 percent below their intrinsic
value of 2,021 yen.
    "What I see is that people are looking for very selective
buying at the moment with strong fundamentals," a Tokyo-based
trader said.
    "There is a huge concern on the April-June quarter after the
sales tax hike. People don't know how much impact it will have
on consumption."
    Underscoring the worries about the tax's impact, Japanese
business sentiment is expected to slide after the hike in April,
even though it improved for a third straight month in January, a
Reuters poll showed. 
    The broader Topix index added 0.3 percent to
1,303.47, with volume at 33 percent of the full daily average
for the past 90 trading days.
    Banks were higher, with Mizuho Financial Group up
2.1 percent, Mitsubishi UFJ Financial Group adding 0.9
percent and Sumitomo Mitsui Financial Group up 1.2
percent.
    A bullish report on Mizuho, the most-traded stock on the
main board, from Goldman Sachs this week also boosted the
sector. Mitsubishi UFJ was the third-most traded.
    The banking sector gained 50 percent in 2013,
underperforming the Nikkei.
    The JPX-Nikkei Index 400, a recently introduced
gauge comprised of companies with a high return on equity and
robust corporate governance, rose 0.3 percent to 11,764.68.
    Mitsubishi Motors Corp, the second-most traded
stock on the main board, seesawed after it priced an offering of
new shares at 1,120 yen each, a 4 percent discount from
Wednesday's close. It was last up 0.2 percent.
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