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Market Update

Nikkei Advances on Bank Earnings Optimism, Mothers Index Soars

Author: Marcus Jacob
Last Update: 10:31 AM ET January 29 2013

5:00 PM Tokyo – The Nikkei index extended gains and broader markets focused Topix index gained to rise 26% since November 14. Banks and financial lenders rose on the hopes that latest quarterly results will surpass the expectations. Smaller cap focused index soared 48% in the year so far.

Stocks in Tokyo extended rally for the tenth week in a row and smaller stocks surged again this month.

The so called “Abe rally” was extended further on the hopes that banks are likely to report better than expected earnings and one of the largest beneficiaries of the new government policies of weaker yen and higher inflation target.

Nikkie newspaper reported, without citing sources, two largest banks Sumitomo Mitsui Financial Group Inc and Mitsubishi UFJ Financial Group are expected to report record nine-month earnings that are likely to top 500 billion yen each.

The Nikkei 225 Stock Average gained 42.41 or 0.4% to 10,864.84 and the broader Topix Index increased 6.98 to 920.76.

The yen edged down to 90.45 against one dollar at close.

Smaller companies focused Mothers index of emerging growth companies extended gains and soared 48% in the month so far and has surged 71% since June of 2012, the Nikkei index in the period has jumped 25%.

Stocks in Review

GS Yuasa added 2 yen to 331 yen, IHI up 1 yen to 235 yen and Fuji Heavy Industries slipped 7 yen to 1,180 yen. All Nippon Airways Co gained 2 yen to 179 yen.

Toyota Motor Corp. increased 10 yen to 4,325 yen despite reporting that global auto sales increased and target 9.91 million units in 2013.

Honda Motor Co. jumped 30 yen to 3,430 yen and Nissan Motor Co Ltd climbed 39 yen or 4.4% to 934 yen. Mazda Motor Corp advanced 8 yen to 240 yen.

Nippon Steel up 7 yen to 237 yen and JFE Holdings Inc climbed 50 yen to 1,815 yen.

Shimano Inc increased 10 yen to 5,920 yen.

Sony Corp slipped 22 yen to 1,385, Canon Inc declined 40 yen to 3,290 yen and Nikon jumped 34 yen to 2,585 yen. TDK Corp climbed 120 yen to 3,280 yen.

Nintendo Co. Ltd slumped 40 yen to 9,550 yen and Pioneer Corp. closed unchanged at 227 yen.

Sony slipped 1.6% and Nintendo slid 0.4% after Oriental Morning Post reported citing unnamed sources in culture ministry in China that denied reports in China Daily that the country would lift a 12-year ban on the sale of video game consoles.

Fanuc Corp. climbed 380 yen to 13,930 yen and Komatsu Ltd aded 30 yen to 2,385 yen. Hitachi Construction Machinery Co increased 31 yen to 1,956 yen.

Softbank Corp gained 25 yen to 3,065 yen. KDDI increased 3% to 6,530 yen after the mobile operator increased its operating profit outlook to 505 billion yen and said it will split its stock 2-for-1 on April 1.

FamilyMart Co Ltd, the convenience chain operator slumped 30 yen to 3,670 yen and Lawson closed unchanged at 6,510 yen. Ito En Ltd increased 13 yen to 1,735 yen.

Seven & I Holdings Co dropped 36 yen to 2,758 yen. Fast Retailing Co. declined 90 yen to 22,850 yen and J. Front Retailing Co. Ltd lowered 5 yen to 495 yen.

Mitsubishi UFJ Financial Group gained 18 yen to 497 yen and Sumitomo Mitsui Financial Group climbed 145 yen or 4.4% to 3,450 yen. Dai-Ichi Life increased 1.5% to 131,900 yen.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc