Nikkei bounces from 4-month low; Panasonic, Toyota soar on earnings

Tue Feb 4, 2014 9:14pm EST

* Nikkei up 1.4 pct, Topix up 2 pct
    * Dips this week created buying opportunities - traders
    * Sony gains on talks to sell loss-making PC business

    By Ayai Tomisawa
    TOKYO, Feb 5 (Reuters) - The Nikkei average climbed more
than 1 percent on Wednesday, bouncing from a four-month low hit
the previous day, as investors scooped up recently battered
stocks like Panasonic and Toyota Motor following strong earnings
results.
    Panasonic Corp jumped more than 15 percent and was
the fifth-most traded stock on the main board after its
quarterly earnings more than tripled. 
    Toyota Motor Corp rose more than 5 percent and was
the second-most traded stock after it raised its annual profit
forecast to a record level, while Hitachi Ltd gained
4.1 percent after also lifting its guidance. 
 
    The three companies had fallen between 5.4 percent and 10
percent during the first two days of this week.    
    Traders said such dips were creating buying opportunities,
although such bargain hunting may be short-lived as most
investors do not want to aggressively cover their short
positions until they see the U.S. jobs data due on Friday.    
    "The Japanese market has not been able to avoid
repercussions from global economic frustrations like poor U.S.
factory data and emerging market worries," said Jun Yunoki, a
strategist at Nomura Securities. "But people have come to
realise that some companies are overly sold despite their
positive earnings outlooks."
    The Nikkei was up 1.4 percent at 14,206.98 in
midmorning trade. On Tuesday, it had stumbled 4.2 percent to
14,008.47, marking its lowest closing level since Oct. 8 and its
biggest one-day percentage decline since June 2013.
    The benchmark was still trading below its 200-day moving
average, which had been seen as a long-term support line.
    The Topix gained 2 percent to 1,161.84, with all of
its 33 subsectors in positive territory.
    Shares of Sony Corp, which had been hit by a
ratings downgrade by Moody's and concerns about its
fundamentals, jumped 7.8 percent on news it is in talks with
investment fund Japan Industrial Partners to sell its
loss-making Vaio personal computer division. 
    "We were selling Sony when there was a downgrade and media
reports suggesting some kind of a tie up with Lenovo, but we can
buy Sony shares if the company is really selling its struggling
PC business," said a fund manager at a Japanese asset management
firm.
    But Kobe Steel Ltd dropped 5.1 percent to 145 yen,
its lowest since July 2013, on dilution fears after the
steelmaker said it would raise up to 100.57 billion yen ($993
million) in a global share offering to invest in its main plant
to become more competitive. 
    The JPX-Nikkei Index 400, an index launched this
year comprised of firms with high return on equity and strong
corporate governance, rose 1.7 percent to 10,504.22.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.