April 11, 2013 / 3:20 AM / in 5 years

Nikkei rises to highest since July 2008; insurers, autos lead

* Insurers are higher on hopes for domestic demand growth
    * Autos remain attractive among exporters - traders
    * Developers and financials succumb to profit-taking
    * More buying may be seen if yen weakens to 100 to dollar -
fund

    By Ayai Tomisawa
    TOKYO, April 11 (Reuters) - Japan's Nikkei share average
rose to its highest level since July 2008 on Thursday, and while
the market pared some of the gains by the midday break, the
underlying mood remained buoyant after the central bank's
unprecedented stimulus measures announced last week.
    Gains were capped before a psychological resistance level at
13,500 as investors were cautious against the steep rises in the
market.
    Reflationary stocks such as developers and financials, which
outperformed in morning trade, succumbed to profit-taking by the
midday break.  
    The Nikkei rose 0.8 percent to 13,398.41 at the
midday break after earlier rising to 13,496.28, the highest
since July 2008. The index currently trades 6.5 percent above
its 25-day moving average of 12,521.86.
    The insurance sector rose 4.7 percent and was the
best sectoral performer on optimism spurred by Prime Minister
Shinzo Abe's effort to revive the domestic economy through bold
monetary and fiscal expansionary policies. 
    Dai-ichi Life Insurance Co jumped 5.2 percent and
T&D Holdings Inc soared 4.8 percent.
    On the other hand, financials and asset-related shares,
which were higher earlier, gave up their gains as investors
locked in profits.
    Mitsui Fudosan Co dropped 0.2 percent after rising
as high as 4.5 percent and Mitsubishi Estate Co fell
0.7 percent after gaining 3.7 percent. Mitsubishi UFJ Financial
Group added 0.9 percent after rising as high as 2.7
percent.
    As for exporters, traders said that investors are being
selective and they prefer autos to electronics as they are
highly competitive in the global market.
    Toyota Motor Corp rose 4.5 percent, Honda Motor Co
 gained 3.3 percent, while Sony Corp added 0.8
percent.
   Panasonic Corp soared 4.9 percent after JPMorgan
initiated coverage at 'overweight', saying that its strategic
shift to business customers should eventually lead to
sustainable earnings and top-line growth.
    The Topix gained 1.2 percent to 1,134.18.
    The massive stimulus steps unveiled by the Bank of Japan
last week and the government's fiscal expansionary measures have
continued to drive demand for Japanese equities.
    The Nikkei has surged over 50 percent since November and the
yen has fallen to four-year lows versus the dollar on the back
of the bold monetary and fiscal expansionist policies.
    Before the opening bell, Japan's February machinery orders
data was out, which rose at the fastest pace in since mid-2011
in a sign that capital spending could pick up this year.
    "It may take a while to see companies increase capital
spending, but the figures were generally good," said Masaru
Hamasaki, a senior strategist at Sumitomo Mitsui Asset
Management.
    But further gains in the Nikkei will likely depend on the
yen's move, he said.
    "As long as the dollar is hovering just below 100 yen,
investors may not chase the market higher. The 100-mark is a big
milestone, so if it reaches that level, more buying will be
seen."
    The yen last traded at 99.41 yen to the dollar. On
Wednesday, the dollar hit a four-year high of 99.88 yen
.

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