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Market Update

Nikkei Soars 2.5% on China Manufacturing Data and Earnings Releases

Author: Hiruki Nakamura
Last Update: 9:15 AM ET August 01 2013

4:30 PM Tokyo – Stocks in Tokyo soared after short sellers covered positions and earnings announcements picked up momentum. The official read on Chinese manufacturing showed slight expansion. Mitsubishi UFJ and Mizuho are the two latest banks reporting higher earnings. Sony sales rose on weaker.

Market indexes in Tokyo surged 2.5% after official estimate of manufacturing sector in China showed an expansion but a private estimate released later showed a decline.

Purchasing Managers’ Index increased to 50.3 in July from 50.1 in June, Chinese government said in a report today. The increase was larger than expected and showed manufacturing sector is stronger than earlier believed.

In a separate manufacturing report released by HSBC that assigns higher weighting to private sector manufacturing released after the official report showed activities declined for the third month in a row to the lowest level in a year on weaker new orders.

The Nikkei 225 Stock Average climbed 337.45 or 2.5% to 14,005.77 and the Topix jumped 31.69 to 1,163.39.

The yen gained in Tokyo trading to one-month high to close at 98.73 against one dollar.

Stocks in Review

Toyota Motor Corp jumped 250 yen to 6,220 yen and Honda Motor Co. fell 25 yen to 3,605 yen. Nissan Motor Co Ltd rose 12 yen to 1,039 yen.

Sony climbed 36 yen to 2,104 yen after the electronics products maker said revenue in the first quarter jumped 13% to 1.71 trillion yen from 1.51 trillion yen and operating profit of 36.4 billion yen. Net in the quarter swung to a profit of 3.5 billion yen compared to loss of 24.6 billion yen.

For the year, Sony kept its operating profit outlook unchanged to 230 billion yen.

The Nikkei newspaper said Sony is expected to reject Loeb''s proposals to separate its entertainment business.

Canon Inc gained 70 yen to 3,095 yen and Nikon closed unchanged at 2,049 yen.

Fanuc Corp soared 620 yen or 4.2% to 15,480 yen and Softbank Corp surged 430 yen or 6.9% to 6,670 yen.

Seven & I Holdings Co increased 95 yen to 3,795 yen and Fast Retailing Co. climbed 650 to 34,200 yen.

Mitsubishi UFJ Financial Group rose 24 yen to 625 yen after the bank reported total income in the first quarter climbed 9.8% to 1.32 trillion yen and net profit jumped to 255.29 billion yen compared to 182.92 billion yen a year earlier.

The bank net profit declined 11% from a year ago to 760 billion yen.

Sumitomo Mitsui Financial Group advanced 185 yen or 4.1% to 4,670 yen.

Mizuho Financial Group, Inc. jumped 4.9% to 213 yen after the bank reported net profit in the first quarter surged 35% to 247.95 billion yen compared to 183.92 billion yen a year earlier.

The bank maintained its net profit outlook for the year at 500 billion yen.

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