*Nikkei gains 5.8 pct, after 3.6 pct fall on Friday
*Machinery stocks gain on hopes for China economic plan
*Exporters rise after Wall St gain, softer yen helps
(Adds stocks, details)
By Aiko Hayashi
TOKYO Nov 10 The Nikkei average gained 5.8
percent on Monday as China's nearly $600 billion economic plan
helped boost investor confidence, encouraging buying of shippers
and machinery firms such as Hitachi Construction Machinery.
Exporters such as Canon Inc (7751.T) also buoyed the market,
helped by a softer yen and after Wall Street rebounded on Friday
following a two-day sell-off, with investors snapping up shares
in the wake of a drop in October payrolls data that was large but
not as dire as had been feared. [.N]
"What we are seeing is largely short-covering after Toyota
dragged down the market on Friday with a profit warning, but
overseas markets ended higher. That has underscored the cheapness
of Japanese stocks," said Masaru Hamasaki, a senior strategist at
Toyota Asset Management.
"Hopes for the Chinese plan also helped the market, because
if it succeeds in stimulating capital spending there it could
support exports of capital goods from Japan."
In light trade, the benchmark Nikkei .N225 climbed 498.43
points to close at 9,081.43, after ending Friday down 3.6
The broader Topix .TOPX gained 4.3 percent to 916.65.
The dollar rose to 98.95 yen, up 0.7 percent from late U.S.
trading on Friday. JPY=
Yutaka Miura, a senior technical analyst at Shinko
Securities, said news of the Chinese government spending plan was
positive, in addition to gains in U.S. stocks and a softer yen,
seen as a reason for gains in Japanese stocks.
"But it's questionable if China could buoy the global economy
as its economy is also supported by exports to Europe and the
United States," he said.
"Unless the European and the U.S. economies improve, China
cannot be the leader, though it may be able to provide some
support in the meantime."
Players said the market had priced in poor Japanese machinery
The figures, released early on Monday, showed the biggest
quarterly fall in a decade for July-September, with manufacturers
expecting only a small rebound in the last quarter of the year --
boding ill for capital investment as the economy teeters on the
brink of recession. [ID:nT17704]
MACHINERY STOCKS, SHIPPERS SHINE
Machinery stocks gained in spite of the data, with Hitachi
Construction soaring 19 percent to 1,252 yen. Komatsu Ltd
(6301.T) climbed 12 percent to 1,254 yen and Kubota Corp (6326.T)
gained 16.9 percent to 547 yen.
Shippers gained after China's announcement on Sunday of its
economic plan, which is focused largely on infrastructure and
social projects, with the shipping sub-index .ISHIP.T surging
10.4 percent to become the biggest gainer among Tokyo's
Mitsui O.S.K. Lines (9104.T) shot up 12 percent to 523 yen
and Nippon Yusen, (9101.T) Japan's largest shipping firm, jumped
9.9 percent to 500 yen, while steelmaker Nippon Steel Corp
(5401.T) advanced 6.6 percent to 323 yen.
Exporters climbed, with Canon rising 5.2 percent to 3,440 yen
and Honda Motor Co (7267.T) adding 4.7 percent to 2,365 yen.
So-called defensive shares such as drugmakers rose, as
investors nervous about the global economic outlook bought shares
seen as resilient in the face of economic slowdowns.
Astellas Pharma Inc (4503.T) rose 8.3 percent to 4,170 yen
and Takeda Pharmaceutical (4502.T) climbed 5.6 percent to 4,930
Another notable stock, Kawasaki Heavy Industries Ltd,
(7012.T) soared 14.1 percent to 211 yen after the machinery maker
said it had received orders for another 140 New York subway cars
worth about $275 million.
Trade was light on the Tokyo exchange's first section, with
2.12 billion shares changing hands, compared with last week's
daily average of 2.55 billion.
Advancing stocks outnumbered declining ones by nearly 6 to 1.
(Reporting by Aiko Hayashi; Editing by Michael Watson)