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Market Update

Nikkei Surges on Technical Rebound, Retail Sales Rise 0.8%

Author: Hiruki Nakamura
Last Update: 5:58 PM ET September 30 2015

4:30 PM Tokyo Nikkei average in Tokyo surged on a technical rebound and investors overlooked the weak factory output and retail sales data. Japan Tobacco plunged 10% after the company agreed to an expensive purchase of brands from Reynolds America.

Stocks in Japan rebounded and reacted to international events ahead of economic data from China and local manufacturing sector survey.

The Bank of Japan is scheduled to release its tankan survey and China is scheduled to release its manufacturing survey on Thursday and the U.S. is scheduled to release its monthly jobs data on Friday.

On the economic front, retail sales in August rose 0.8% followed by 1.8% increase in July, the Ministry of Economy, Trade and Industry said.

On a seasonally adjusted basis monthly retail sales in August were flat compared to 1.4% decline in previous month.

In addition, factory output index showed a decline for the second month in a row in August and following the decline in June quarter.

The weak manufacturing data has only led to more speculation that the government or the central bank may offer additional stimulus and provide additional support to stocks.

The Nikkei 225 Stock Average surged 457.31 or 2.7% to 17,388.15 and the broader Topix index jumped 35.64 or 2.6% to 1,411.16.

For the month, Nikkei 225 plunged 9.2% and for the third-quarter tumbled 14.2% but soared 7% from a year ago month.

However, short selling ratio reached a new high of 43.4, according to the data released by the Japan Exchange Group.

The yen strengthened to 120.06 against a dollar.

Stocks in Review

Japan Tobacco Inc plunged as much as 10% before closing down 6.7% or 266 yen to 3,695 yen after the company agreed to acquire rights and brands from Reynolds America for 600 billion yen.

Mizuho Financial Group Inc advanced 2.3% to 222.90 yen after the financial services provider agreed to acquire 16% stake in the U.S.-based Asia-focused fund manager Matthews International Capital Management LLC for about 23.9 billion yen or $200 million.

Milbon Co., Ltd jumped 4.9% to 3,955 yen after the hair cosmetics maker reported net sales in the nine-month period ending in September increased 8.4% from a year ago to 19.98 billion yen.

Net income in the period soared 26.3% to 2.33 billion yen compared to 1.85 billion yen and earnings per share rose to 142.40 yen from 112.71 yen.

The company estimated net sales for the year ending in December to increase 6.6% to 26.90 billion yen and net income to edge up 0.3% to 2.63 billion yen.

Star Micronics Co., Ltd increased 3.2% to 1,626 yen after the machine tools and precision parts maker stated said net sales in the first-half ending in August jumped 19% from a year ago to 27.17 billion yen.

Net income in the period tumbled 12.2% to 1.86 billion yen compared to 2.11 billion yen and diluted earnings per share slumped to 43.75 yen from 50.09 yen.

Star Micronics forecasted revenues for the year to soar 8.9% to 55.50 billion yen and net income to inch up 0.1% to 4.70 billion yen.

Tri-Stage Inc gained 1.2% to 1,980 yen after the marketing services provider said net sales in the first-half ending on August 29 soared 13.7% from a year ago to 18.49 billion 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