Nikkei bounces as upbeat earnings, solid U.S. growth improves mood

Thu Jan 30, 2014 9:20pm EST

* Foreign investors stay on sidelines to avoid volatility -
trader
    * Retail investors pick up NEC, Japan Tobacco on bright
forecasts
    * Sharp soars on report citing better-than-expected results

    By Ayai Tomisawa
    TOKYO, Jan 31 (Reuters) - The Nikkei share average rose on
Friday morning, recouping some of the previous day's steep
declines as strong Japanese corporate earnings and solid growth
in the United States provided welcome relief for frayed nerves. 
    After days of turmoil in emerging currencies and stocks, a
semblance of calm returned to many of the badly hit markets. 
    The hard-hit Turkish lira and South African rand
 rebounded. Russia's central bank pledged unlimited
foreign exchange interventions if the ruble strays outside its
target band.    
    The mood in Japan improved further on the back of strong
corporate earnings and data showing a jump in manufacturing
output in December. 
    NEC Corp surged 11 percent to 300 yen, the highest
since May 2010 after its April-December operating profit topped
market consensus.
    Japan Tobacco Inc rose 4.7 percent after raising
its operating profit forecast for the year through March to
638.0 billion yen, up from previously forecast 632.0 billion yen
thanks to strong overseas cigarette sales.
    The Nikkei bounced 0.6 percent to 15,099.34 in
mid-morning trade after falling 2.5 percent to 15,007.06 on
Thursday.
    Data showed U.S. gross domestic product grew at an annual
rate of 3.2 percent in the fourth quarter, in line with
expectations. 
    Trader said that despite the relative calm in markets, 
foreign investors were largely on the sidelines after a sell-off
in emerging market assets and slowing growth in China rattled
nerves.
    "They are scared that they might end up losing money if they
jump back in the market now amid this volatility," said a senior
trader at a European brokerage. "They are not taking large
positions until U.S. jobs data are released next week, and until
then, retail investors may pick up shares based on their
earnings results."
    The Topix added 0.6 percent to 1,231.11.
    Recently battered stocks including index-heavyweights and
exporters such as SoftBank Corp and Toyota Motor Corp
 rebounded, rising 1.7 percent and 0.6 percent,
respectively.
    Investors also took heart from news that SoftBank is seeking
to become an electricity supplier in Japan, taking a step
towards breaking into the heavily regulated Japanese power
sector. 
    Sharp Corp soared as much as 6.1 percent to a
one-week high of 384 yen after the Nikkei reported that the
company is expected to post an operating profit of about 100
billion yen for the year ending March, well ahead of the
company's forecast of 80 billion yen.
    The JPX-Nikkei Index 400, a recently introduced
gauge comprised of firms with high return on equity and strong
corporate governance, rose 0.5 percent to 11,116.23.
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