Nikkei climbs after China data, JPMorgan

By Elaine Lies

TOKYO (BestGrowthStock) – Japan’s Nikkei average rose 0.6 percent to a one-week closing high on Thursday, with shippers up on strong Chinese economic growth and the market supported after robust U.S. results from companies such as JP Morgan boosted Wall Street.

Kawasaki Heavy (7012.T: ) climbed 3.5 percent after a report that the Vietnamese cabinet has approved plans to construct a $55.9 billion high-speed rail line connecting the northern and southern parts of the country using Japan’s bullet train technology.

China’s annual economic growth quickened in the first quarter to 11.9 percent, the fastest pace since 2007, benefiting from a low base of comparison last year and the momentum imparted by massive bank-financed stimulus.

JP Morgan (JPM.N: ) stock jumped 4 percent after the second-largest U.S. bank reported quarterly profit that beat forecasts, as investment banking earnings gained and loan losses slowed, joining tech bellwether Intel Corp (INTC.O: ) in posting better-than-expected results.

“There was a bit of a stumble at the start of U.S. results with Alcoa, but after that we’ve had a lot of good news with Intel and JPMorgan,” said Takashi Ushio, head of the investment strategy division at Marusan Securities.

“From next week Japanese results start picking up and expectations for this are good. Combined with the still relatively low valuations of many shares, this is likely to keep the market well supported.”

In active trade, the benchmark Nikkei (.N225: ) rose 68.89 points to 11,273.79, heading back toward an 18-month high of 11,408.17 marked on April 5. The broader Topix (.TOPX: ) climbed 0.8 percent to 998.90

On Wednesday, the S&P 500 (.SPX: ) pushed past 1,200 for the first time in 18 months, while the pan-European FTSEurofirst 300 (.FTEU3: ) hit an 18-month closing high.

“There were some concerns earlier this week about earnings of U.S. financial companies, including JPMorgan, and the market is now receiving a lift after the actual report and strong gains in financial shares overnight,” said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.

“But worries that high-tech exporter shares are getting overheated are putting a lid on further gains in the broader market.”

The Nikkei’s relative strength index (RSI) edged up to 65, with anything from 70 considered overbought, but longer-term technical indicators were mixed. Market players said the uptrend remains unchanged.

Foreign demand for Japanese shares remains solid, with foreign investors buying a net 433.5 billion yen ($4.7 billion) of Japanese stocks last week, but many investors are waiting to see how Japanese companies perform when results kick into a higher gear later this month.

CHINA PLAY

Shipping firms, already up after a key shipping index rose on Wednesday, extended gains as bullish Chinese economic growth data sparked hopes for more demand.

But a trader at a Japanese brokerage said the gains will likely be short-lived as strong data means China would move closer to hiking interest rates, although other analysts said that an easing of inflation in March suggested policymakers might hold off on such a hike.

Mitsui O.S.K Lines (9104.T: ) jumped 5.1 percent to 699 yen and Kawasaki Kisen K.K. (9107.T: ) advanced 4.1 percent to 384 yen. Nippon Yusen (9101.T: ) climbed 2.7 percent to 384 yen.

Shares of Kawasaki Heavy rose to 267 yen. It, Mitsubishi Heavy Industries (7011.T: ), Mitsubishi Corp (8058.T: ) and Sumitomo Corp (8053.T: ) are among Japanese firms that have been trying to persuade Vietnam to adopt Japan’s technology, the Nikkei business daily said.

GS Yuasa Corp (6674.T: ) climbed 3.3 percent to 691 yen after it said its joint venture with Mitsubishi Motors Corp (7211.T: ) would spend 37.5 billion yen ($402.2 million) to build its third lithium ion battery plant in Japan, anticipating growing demand for electric vehicles.

Toshiba Corp (6502.T: ) gained 3 percent to 513 yen after its U.S. executive said the electronics maker’s PC sales in the United States jumped 50 percent in January-March, and that the company was preparing to roll out tablet-style computing devices to compete with Apple Inc (Read more about Apple stock future.)’s (AAPL.O: ) iPad.

Some 2.4 billion shares were traded on the Tokyo exchange’s first section, remaining near a one-month high hit last Wednesday. Advancing stocks outnumbered declining ones by more than 2 to 1.

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(Additional reporting by Aiko Hayashi; Editing by Joseph Radford)

Nikkei climbs after China data, JPMorgan