Tokyo, Aug. 19 (Jiji Press)–Stocks rose sharply almost across the board on the Tokyo Stock Exchange Tuesday morning, as foreign investors stepped up buying encouraged by the Dow Jones industrialaverage’s surge to a fresh 14-month high overnight.
The key Nikkei average briefly hit a high of 10,241.94, climbing above 10,200 for the first time since July 23, 2002.
Fueling the morning’s advance was large-lot buying of stock index futures by foreign hedge funds, which triggered arbitrage buying of cash stocks to help lift the Nikkei average, brokers said.
At the morning finish, the 225-issue Nikkei average stood up 185.65 points, or 1.9 pct, at 10,218.62. The average climbed 169.50 points on Monday, closing above 10,000 for the first time sinceAug. 26, 2002.
The TOPIX index of all first-section issues ended the morning session up 16.80 points, 1.7 pct, at 992.80. It was up 11.22 points on Monday.(MORE)ADD:
Rising issues outnumbered losers 980 to 432 on the first section in the morning, while 112 issues were flat.
Half-day volume swelled to 1,015 million shares.
“The Nikkei’s further upward march after its milestone finish above 10,000 the previous day came against the backdrop of global uptrend of stock markets,” said Nagayuki Yamagishi, senior equity manager at UFJ Tsubasa Securities Co.
Foreign brokerage houses showed large-lot net buying in pre- opening order placement after Wall Street enjoyed hefty gains amid expectations for U.S. economic recovery, brokers said.
Fumiyuki Nakanishi, equity strategist at SMBC Friend Securities Co., said foreign investors moved to bolster buying of index futures in anticipation of strong U.S. economic growth. The country’s domestic product could grow a real 4 pct in the presidential election year of 2004, prompting those investors to select Japanese blue-chip stocks, he said.
Equities’ strength came in contrast to the sluggish bond market, as foreign investors continued to form bond-selling, stock-buying positions, brokers said.
SMBC’s Nakanishi, meanwhile, attributed the phenomenon to increased weighting of equities against bonds in investment trust funds created recently.(MORE)THIRD:
High-techs widely attracted buying, with Advantest, Mitsubishi Electric and TDK rewriting their year-to-date highs.
Among Japan’s Big Four banks, UFJ rewrote its year-to-date high, while Mizuho, Mitsubishi Tokyo and Sumitomo Mitsui also surged on large-lot buying from nonresidents.
Also upbeat were telecom carriers like NTT DoCoMo, NTT and KDDI.
Real estate developers were robust. The gainers included Mitsui Fudosan, Mitsubishi Estate and Sumitomo Realty & Development.
Supermarket giant Aeon rebounded, but its topside appeared heavy. The company on Monday announced that it will form a business and capital tie-up with Sunday, a household goods retailer operating in the northeastern Japan region of Tohoku.
In contrast, major soy sauce maker Kikkoman faltered following a downward revision of its earnings prospect for the current business year announced Monday.
Glass bottle manufacturer Nihon Yamamura Glass fell sharply, apparently reflecting a downward revision of its earnings outlook for April-September.
