Japan's Topix rises to fresh 15-year high

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Japan's Topix stock average inched up to a fresh 15-year closing high on Monday, but rises in commodity and export stocks were counterbalanced by falls in domestically focused sectors.

By the end of the day the Topix was 0.1 per cent higher at 1,816.97. The Nikkei 225 also reached its highest close in almost seven years, rising 0.2 per cent to 18,215.35.

Nikko Cordial soared 12.6 per cent to Y1,364 after it emerged that Citigroup was in talks to take control of Japan's third largest broker. Nikko Cordial's share price has plummeted since an accountancy scandal late last year.

Gains in metals prices pushed up resource companies. Sumitomo Metal Mining leapt 6.5 per cent to Y2,200.

Sony, the consumer electronics and entertainment giant, was up 0.6 per cent to Y6,390 after Merrill Lynch upgraded it to "buy" from "sell". Merrill cited various reasons, including yen weakness and growth in overseas economies.

The bullish sentiment towards the world economy helped push up many export-focused sectors. The auto sector, for example, gained 0.6 per cent. Toyota Motor (NYSE:TM - news), Japan's biggest carmaker, rose 0.7 per cent to Y8,290.

There were signs that some investors were switching from domestically focused stocks to export-focused ones. Many domestic sectors fared poorly on Monday.

Real estate, whose climb in recent months has been almost relentless, declined 1 per cent. Mitsui Fudosan, Japan's biggest property company, fell 1.1 per cent to Y3,570.

The banking sector also declined 1.2 per cent, despite signs that banks may be using last week's interest rates rise by the Bank of Japan to widen their loan margins. Mitsubishi UFJ, the world's biggest bank by assets, fell 0.7 per cent to Y1,510,000. Mizuho Financial, its largest domestic rival, slipped 1.7 per cent to Y860,000.

The recent gains in small-cap stocks - heavily reliant on interest from retail investors - petered out. The Mothers market of smaller growth stocks declined 2.1 per cent to 1,164.07.

Sharp, the consumer electronics maker, fell 1.3 per cent to Y2,290 after UBS downgraded it to "reduce 2" from "neutral 2". UBS cited expectations of slowing profit growth. Sharp has been one of the darlings of the Japanese market recently, its share price rising 37 per cent since mid-July.

Pioneer (NYSE:PIO - news), the audio equipment maker, fell 3.3 per cent to Y1,676 after Deutsche Bank lowered its target price to Y1,500 from Y1,600, citing concerns over its pricing strategy.

source news : news.yahoo.com

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