Nikkei climbs almost 3 pct as resource shares jump

* Nikkei logs biggest 1-day pct gain in more than 2 months

* Broad swathe of sectors gain, resource-linked shares surge

* But trading volume among the lowest so far this year

By Masayuki Kitano

TOKYO, Feb 17 (BestGrowthStock) – Japan’s Nikkei average surged 2.7
percent on Wednesday, chalking up its biggest daily rise in over
two months, as investors snapped up Mitsubishi Corp (8058.T: ) and
other resource-related stocks after a jump in commodities prices.

Tokyo shares were cheered by the previous day’s sharp gains
in European and U.S. shares, with robust earnings and
stronger-than-expected data providing a lift.

Market players said Tokyo shares also drew comfort from a
nearly 2 percent rise in Hong Kong equities (.HSI: ) as the market
reopened after a Lunar New Year holiday, with investors shrugging
off China’s surprise decision late last week to increase bank
reserve requirements. [ID:nTOE61G02G]

Resource-related shares were among the strongest gainers
after oil and other commodities rallied on Tuesday on the back of
a decline in the dollar.

Despite the size of the Nikkei’s jump, trading volume was
near the lowest so far this year, suggesting there was not much
conviction behind the bounce, market players said.

“Today’s rise is probably mostly due to short-covering by
short-term players, judging from the trading activity,” said
Hideyuki Ishiguro, a strategist at Okasan Securities’ investment
strategy department, referring to the low volumes.

“It seems more like buybacks rather than any aggressive
buying,” Ishiguro said.

The Nikkei (.N225: ) rose 272.58 points to 10,306.83 and logged
its biggest one-day percentage gain since Dec. 3. Even after
Wednesday’s rise, the benchmark index is still down 6 percent
from a peak hit in mid-January.

The broader Topix index climbed 2.2 percent to 904.63
(.TOPX: ).

Trading volume was sparse, with roughly 1.8 billion shares
changing hands on the Tokyo exchange’s first section, among the
lowest daily volumes this year.

Advancing shares outnumbered declining ones by nearly 8 to 1.

“There’s a bit more of a shift to riskier assets, especially
those linked to commodities, and this may continue for a day or
two, though we need some kind of new incentive to break above
10,500,” said Tomomi Yamashita, a fund manager at Shinkin Asset
Management.

Drugmaker Merck & Co (MRK.N: ) posted quarterly revenue that
beat analysts’ estimates, which market players said added to
confidence that the U.S. economic recovery is on solid footing.

Also helping sentiment, the New York Federal Reserve’s gauge
of manufacturing in New York state rose more than expected in
February, climbing to its highest level since October, as
inventories jumped. [ID:nN16239334]

Shares of iron and steel makers surged after metal prices
rallied broadly on Tuesday, with nickel prices jumping about 5
percent to a six-month high. [ID:nLDE61F285] [MET/L]

Ferronickel maker Pacific Metals Co Ltd (5541.T: ) climbed 8
percent to 660 yen.

Nippon Steel Corp (5401.T: ), Japan’s biggest steel maker, rose
4.4 percent to 332 yen, while second-ranked JFE Holdings (5411.T: )
gained 5.3 percent to 3,260 yen.

Among trading houses, Mitsubishi climbed 3.4 percent to 2,279
yen.

Investment

(Additional reporting by Elaine Lies; Editing by Chris
Gallagher)

Nikkei climbs almost 3 pct as resource shares jump