Nikkei climbs to 18-mth high, boosted by resources

* Resource-linked shares jump after commodity price rise

* Nikkei up 4.2 percent this quarter, 35 pct in FY2009/10

* But concerns about overbuying may limit gains

By Elaine Lies

TOKYO, March 30 (BestGrowthStock) – Japan’s Nikkei average rose to an
18-month high on Tuesday, with commodity-linked shares such as
Mitsubishi Corp (8058.T: ) climbing after commodity prices gained
on a weaker dollar and strong U.S. consumer spending bolstered
economic recovery hopes.

Kobe Steel (5406.T: ) climbed 3.1 percent to 202 yen after
raising its forecast to a recurring profit of 5 billion yen for
the financial year ending this month, from its previous forecast
for a loss of 5 billion yen, and other steelmakers also gained.

Market players said that while the Nikkei is likely to keep
on gaining in the new business year and quarter starting on April
1, concerns it may be overbought on a short-term basis could lead
to some profit-taking, limiting gains.

“The next quarter is likely to see the Nikkei boxed into a
10,000-11,500 range,” said Yutaka Miura, chief technical analyst
at Mizuho Securities.

“It’s risen quite a lot recently on hopes for global economic
recovery and good Japanese results, but if these don’t live up to
expectations there could be some short-term profit-taking.”

As of Monday’s close, the Nikkei had gained roughly 4.2
percent for the quarter and 35 percent for the financial year
ending on Wednesday.

The benchmark Nikkei (.N225: ) was up 0.5 percent or 51.61
points at 11,038.08 at the midday break, after earlier rising as
far as 11,062.09, its highest since October 2008. The broader
Topix (.TOPX: ) climbed 0.7 percent to 973.00.

The Nikkei’s relative strength index (RSI) currently comes in
at 68, with anything from 70 and up considered overbought. But
other movement indicators, such as MACD, suggest the Nikkei is
still in an uptrend.

“We’re in a situation where the market is rising steadily and
will likely continue to rise, even though some technical signals
are suggesting it’s getting close to overbought,” said Kenichi
Hirano, operating officer at Tachibana Securities.

“Though there are expectations for good earnings and economic
improvement, it’s really much more a situation of strong demand.”

Industrial production figures that showed a 0.9 percent fall
for February, the first slip in a year, were having little
immediate effect, with market players saying forecasts of a 1.4
percent rise in March offset any negative impact.

Commodities-linked shares climbed after gold hit its highest
in more than a week on Monday as risk appetite increased, while
other metals rose sharply as economic optimism boosted demand for
industrial commodities.

Copper marked its highest level since August 2008 and crude
oil prices jumped. [GOL/] [ID:nLDE62S0WY]

Mazda Motor (7261.T: ), Japan’s No.5 carmaker, gained 2.4
percent to 252 yen after Toyota Motor (7203.T: ) and Mazda
announced a deal under which Japan’s top automaker will supply
its hybrid technology under licence to Mazda. [ID:nTOE62S05N]

Toyota shares were flat at 3,740 yen.

Growth Stocks

(Reporting by Elaine Lies; Editing by Chris Gallagher)

Nikkei climbs to 18-mth high, boosted by resources