February 14, 2011 / 6:40 AM / 8 years ago

Nikkei hits new 9-month high on China data

* Nikkei extends gains on China data -trader

* Shippers, construction equipment stocks attract buyers

By Ayai Tomisawa and Taiga Uranaka

TOKYO, Feb 14 (Reuters) - Japan’s Nikkei average rose to a nine-month high on Monday as upbeat Chinese economic data boosted investor confidence, while maritime transport and construction equipment stocks attracted buying.

Traders said a shift to developed markets from emerging markets was continuing, but due to China’s strong trade data, there was buying in overall Asian markets including Shanghai and Hong Kong on Monday.

“I don’t necessarily see an allocation shift (today). It’s easing concerns of tightening in emerging markets,” said Mattia Ciancaleoni, director of equity sales at Citigroup.

China’s exports grew 37.7 percent in January from a year earlier and imports rose 51 percent, state television said on Monday, resulting in a trade surplus of $6.5 billion compared with $13.1 billion in December.

The median forecast of economists polled by Reuters last week was for exports to rise 22.4 percent in January and imports to grow 28 percent, for a trade surplus of $10.7 billion. [ID:nTOE71904H]

“People are relieved that demand is still strong despite China’s recent rate hike,” said Ciancaleoni.

China last week announced its third rate hike since October and investors predict the central bank will move again over the medium term as consumer inflation is expected to remain at high levels.

The benchmark Nikkei .N225 ended up 1.1 percent or 119.89 points at its intraday peak of 10,725.54, its highest since May 6 last year. The broader Topix .TOPX rose 1.3 percent to 959.19.

“Japanese stocks have been lagging behind overseas markets so far, but now investors are assuming that they may even outperform other markets,” said Kenichi Hirano, operating officer at Tachibana Securities. He said the Nikkei may test the psychologically important 11,000 level this week.

“Foreign investors have been net buyers of Japanese stocks for 14 straight weeks. At the beginning they were mostly hedge funds covering short positions. But recently overseas pension funds have been buying Japanese stocks as they are moving to correct low allocations to Japanese equities,” he said.

Shippers outperformed, with Mitsui OSK Lines (9104.T) gaining 3.8 percent to 579 yen and Kawasaki Kisen (9107.T) adding 2.8 percent to 370 yen.

Construction equipment stocks were also strong, with Komatsu Ltd (6301.T) rising 3.0 percent to 2,568 yen and Hitachi Construction Machinery (6305.T) gaining 1.5 percent to 2,046 yen.

The dollar was slightly lower against the yen at 83.25 yen on Monday, after gaining 1.5 percent in the past week.

Among exporters lifted by the weaker yen, Honda Motor (7267.T) rose 2.8 percent to 3,640 yen and Toyota Motor (7203.T) gained 2.5 percent to 3,870 yen.

Camera and endoscope maker Olympus Corp (7733.T) surged 4.8 percent to 2,570 yen after it said its next president and chief operating officer would be British-born Michael Woodford, 50, who oversaw a restructuring of the firm’s European operations. [ID:nTOE719046]

Volume was slightly lower, with 2.08 billion shares changing hands on the Tokyo stock exchange’s first section, lower than the last week’s daily average volume of 2.16 billion.

A total of 1,190 shares advanced while 343 declined. (Editing by Michael Watson)

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