Replies to post #12786 on FinancialAdvisor's College Class (FACC)

[SilverSurfer]

as an elixir to FA megabear see BlissBull inanebull

[FinancialAdvisor]

Nikkei dips as banks lose steam, trade hits record

*CLOSES DOWN -.18% on RECORD volume... sign of things to come???...

Nikkei dips as banks lose steam, trade hits record
Tue Nov 8, 2005 03:02 AM ET
(Adds Mitsubishi Materials, TEPCO, comments)
By Risa Maeda

TOKYO, Nov 8 (Reuters) - The Nikkei average edged down 0.18 percent on Tuesday as profit-taking hit banks, but buyers flocked to steel makers such as Sumitomo Metal Industries Ltd. (5405.T: Quote, Profile, Research) on earnings optimism, boosting trading volume to a record high.

The Tokyo bourse, the world's second biggest, saw its busiest day of trade on the first section in its 56-year history, with a record 4.56 billion shares changing hands. That was well above the previous record of 3.70 billion shares, set on Nov. 2.

The Nikkei retreated as investors moved away from recent gainers such as banks and resource stocks, but analysts said investor appetite remained firm due to high hopes for Japan's economic recovery.

"Now that the market's sentiment is strong, everything looks positive for us," said Masaharu Sakudo, advisor at Tachibana Securities.

"Corporate earnings have been solid, underlining the strength of the economy, and the recent market rally, together with a rise in winter bonuses, is among factors boosting money seeking risks," he said.

The Nikkei fell 24.87 points to 14,036.73. It lost 0.10 percent on Monday after hitting a four-year closing high the previous session.

The broader TOPIX index fell 0.11 percent to 1,497.53. It hit a five-year closing high of 1,499.12 on Monday.

Decliners beat advancers 930 to 637.

Tokyo Electric Power Co. Inc. (TEPCO) (9501.T: Quote, Profile, Research) , Asia's biggest power utility, may come under the spotlight when the market reopens on Wednesday.

TEPCO after the market closed posted a 41 percent fall in first-half profit, hit by increased fuel costs, but forecast annual profits that would beat the market consensus.

Mitsubishi Materials Corp. (5711.T: Quote, Profile, Research) , Japan's biggest non-ferrous metals smelter, posted a 72.4 percent surge in first-half profit after the close. It more than doubled its annual profit forecast to a record thanks to the planned initial public offering of its joint venture SUMCO Corp. (3436.T: Quote, Profile, Research) .

Prior to the earnings announcements, shares of TEPCO were up 0.35 percent at 2,875 yen, and those of Mitsubishi Materials closed up 4.8 percent at 436 yen.

STEELS GAIN GROUND

Helped by extended gains in JFE Holdings Inc. (5411.T: Quote, Profile, Research) , Japan's second-biggest steel maker, which a day earlier posted a higher-than-expected first-half profit, the steel sector rallied 6.2 percent.

Japan's No. 3 steel maker Sumitomo Metal, the most active issue by value, jumped 9.3 percent to 460 yen.

Second-ranked JFE was up 7.7 percent at 4,050 yen, adding to a 2.7 percent gain on Monday after it reported a 42 percent jump in first-half profit.

"The steel sector had been under pressure due to increased inventory domestically. Then came JFE's half-year earnings yesterday, which helped investors return," said Kazuhide Hayashi, deputy general manager at Norinchukin Zenkyoren Asset Management.

"But as for the market as a whole, I see a short-term correction -- a minor one though," he said, adding that demand for bargains would keep the TOPIX from falling below 1,370, a level at which the Tokyo market saw a sell-off stop in October.

Banks reversed recent gains on Tuesday, with industry leader Mitsubishi UFJ Financial Group Inc. (8306.T: Quote, Profile, Research) falling 1.8 percent to 1.62 million yen.

Mizuho Financial Group Inc. (8411.T: Quote, Profile, Research) , Japan's No.2 banking group, fell 0.1 percent to 878,000 yen. Mizuho had risen in the previous nine sessions as investors took in their stride its $4.6 billion share issue, Japan's largest this year, last Wednesday.

As of Monday's close, the banking sector sub-index had risen 12.3 percent since the Bank of Japan lifted its forecasts for consumer prices and economic growth on Oct. 31, raising expectations the central bank will soon scrap its super-easy monetary policy.

Given views that the BOJ will likely keep interest rates near zero for some time even after it abandons the policy, banks are seen enjoying a widening gap between borrowing and lending rates.

Lower oil prices dented resource-related firms, with Japan's top general trading firm Mitsubishi Corp. (8058.T: Quote, Profile, Research) falling 1.2 percent to 2,395 yen.

U.S. crude oil futures (CLc1: Quote, Profile, Research) were flat to lower in Asia on Tuesday after losing more than $1 per barrel the previous day, as unseasonably warm weather in the U.S. Northeast, the world's biggest heating oil market, continued to pressure prices.

Nippon Oil Corp. (5001.T: Quote, Profile, Research) , Japan's largest oil refiner, lost 4.9 percent to 869 yen, adding to a 6.3 percent fall the previous day after a UBS downgrade following the company's first-half earnings stoked concerns about its profit outlook.


LINK: http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh89153_2005-11-08_08-02-43_t83...