Japan Nikkei creeps higher amid search for new PM
Japanese stocks ended mixed with the benchmark Nikkei edging up by 0.15 per cent on defensive buying of medical shares.business Updated: Sep 13, 2007 15:29 IST
Japanese stocks ended on Thursday mixed with the benchmark Nikkei edging up by 0.15 per cent on defensive buying of medical shares such as Terumo Corp, while strong oil prices boosted energy shares.
But the broad TOPIX index slipped amid thin trade, with a waiting mood deepening ahead of the selection of a new Japanese prime minister and next week's US Federal Reserve meeting, while sales of high tech stocks such as Toshiba Corp weighed on the market.
In a shock announcement, Prime Minister Shinzo Abe said on Wednesday that he was going to resign.
"Nobody's really taking part in the market in a long-term way before the Fed meeting, and foreigners appear to be staying away due to political uncertainty, since without a new prime minister we have no real clues to economic policy," said Norihiro Fujito, general manager at Mitsubishi UFJ Securities.
"What we've seen recently is mainly short-term moves by day traders, with overall volume quite low. The market's just run out of steam for now."
Much of the activity was driven by factors specific to certain companies rather than sectors or the market as a whole, but amid the general uncertainty investors moved to snap up defensive shares like Terumo and drugs companies such as Astellas Pharma Inc.
Energy shares were also firm on strong oil prices after US crude hit a record $80 a barrel overnight on tight US inventories and potential supply disruption from a tropical storm in the Gulf of Mexico.
Tokyo lagged other Asian markets, with MCSI's measure of Asia Pacific stocks excluding Japan up by 0.2 percent as of 0613 GMT.
The benchmark Nikkei 225 average crept up 23.59 points to 15,821.19, while the broader TOPIX index was down by 0.4 percent, or 5.40 points lower, at 1,526.20.
Trade was light with 1.6 billion shares changing hands, compared with a daily average volume of 2.3 billion shares in August. Decliners beat advancers by 1,067 to 539.
With foreign investors driving much of Tokyo trade, some market participants felt trends well be determined by how they judge the next Japanese prime minister and his economic policies.
Ruling party secretary-general Taro Aso is widely seen as a frontrunner, but Finance Minister Fukushiro Nukaga became the first to launch a bid to become ruling party president and hence premier on Thursday.
"Everyone's talking about Aso, but there's no guarantee that it'll be him. This is causing players both in and outside of Japan to stay away from active trade for now," said Fujito.
TOSHIBA DOWN, OIL UP
Toshiba Corp fell 4.4 per cent to 954 yen after Goldman Sachs said in a report on Thursday that the price of NAND flash memory will weigh on the shares of Toshiba.
Goldman said according to DRAMeXchange which provides research on major electronics components, the OEM price for 16-GB MLC NAND flash memory was $15.64 in the first half of September, down 11 per cent from the second half of August.
Other high tech firms also lost ground, with Canon Inc down by 3.5 per cent at 5,830 yen and Hitachi down 1.4 per cent at 703 yen.
Market players turned defensive, snapping up pharmaceutical stocks such as Takeda Pharmaceutical, which was up 2 percent at 7,980 yen, and Astellas, which was up 2.7 per cent at 5,340 yen.
Terumo Corp, a medical equipment manufacturer, gained 2.9 per cent to 5,670 yen.
Oil explorer INPEX Holdings was up 3.5 per cent at 1.17 million yen and Nippon Oil Corp was up 2.2 percent to 1,013 yen.
First Published: Sep 13, 2007 15:25 IST