Nikkei gains after shrugging off BOJ tankan; China PMI lifts mood

Mon Jun 30, 2014 10:28pm EDT

* Fewer foreigners trading as Hong Kong markets closed -
trader
    * Retail investors buy Mixi, Kenedix - trader
    * BOJ tankan shrugged off as market focuses on economic
recovery - analysts

    By Ayai Tomisawa
    TOKYO, July 1 (Reuters) - Japan's Nikkei share average rose
on Tuesday as upbeat China factory reports offset some weak
spots in the Bank of Japan tankan survey.
    Big Japanese manufacturers' business sentiment worsened in
the three months to June but is poised to improve in the
following quarter, the central bank survey showed.
 
    The Nikkei was up 1.3 percent at 15,356.27 by late
morning, nearing a five-month high of 15,442.67 hit last week.
    China's official factory data showed activity at a six-month
high in June, while a private survey of small and medium-sized
firms showed the first expansion in six months on stronger
demand. 
    Market players said that the market largely shrugged off the
BOJ tankan as a temporary dip in sentiment had been expected
after a sales tax hike in April, and the economy is seen
rebounding in the third quarter.
    "What matters to investors is a recovery in the economy, and
the economy is recovering as the BOJ has said, so there is more
upside in the stock market in the coming months," said Jun
Yunoki, a strategist at Nomura Securities.
    He expects that the Nikkei will aim for 17,500 by the end of
September.
    The BOJ survey also indicated that big firms also plan to
raise capital expenditure by 7.4 percent in the current fiscal
year ending in March 2015, more than initially expected, as
premier Shinzo Abe's stimulus policies brighten prospects for
the world's third-largest economy.
    "Retail investors have been buying up today," said a senior
trader at a foreign brokerage, adding that such stocks as Mixi
Inc and Kenedix Inc, which are among domestic
players' favourite stocks, are in demand.
    Mixi gained 4.9 percent and Kenedix soared 4.4 percent.
    Risk appetites were lifted as activity in China's factory
sector quickened to a six-month high in June. 
    Exporters were in demand, with Toyota Motor Corp 
rising 1.3 percent, Sony Corp gaining 1.7 percent and
Fanuc Corp advancing 2.1 percent.
    The broader Topix rose 0.9 percent to 1,274.07,
while the new JPX-Nikkei Index 400 gained 1.0
percent to 11,576.95.

 (Editing by Kim Coghill)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.