Nikkei edges up 0.1 pct as bank shares surge

* Banks bolster Nikkei, foreigners seen likely buyers

* Exporters face profit-taking after rally

* RSI shows Nikkei overbought, but not as much as before

By Masayuki Kitano

TOKYO, April 7 (BestGrowthStock) – Japan’s Nikkei average rose 0.1
percent on Wednesday, as a surge in banking shares on a brighter
outlook for the U.S. financial sector offset profit-taking in
other stocks after the benchmark’s recent rally to 18-month
highs.

Wells Fargo Securities raised its rating on large-cap U.S.
banks on Tuesday, citing more clarity on asset-quality trends,
and this lifted the banking sector on Wall Street. [RCH/US]

But the yen’s regaining of some ground after hitting a
seven-month low against the dollar this week, was encouraging
investors to take profits in exporters and shifting into sectors
that have lagged the broader market.

“If you are interested in shares that are the front-runners,
it’s difficult to buy them right now as there are concerns about
them being overheated, said Mitsushige Akino, chief fund manager
at Ichiyoshi Investment Management.

“But market sentiment has improved, and when you think about
what to buy, you take a look at the lagging shares,” he said.

The Nikkei (.N225: ) edged up 10.51 points to 11,292.83 on
Wednesday. It hit an 18-month intraday high of 11,408.17 earlier
this week.

The broader Topix index (.TOPX: ) rose 0.5 percent to 995.54.

The Nikkei’s relative strength index (RSI) has fallen
slightly from a peak of 76 hit earlier this week but still held
above 70, which is considered overbought territory. But the
Nikkei’s trend looks bullish on daily Ichimoku charts.

Banking shares drew support from buying interest among
overseas investors, said Hiroaki Kuramochi, chief equity
marketing officer at Tokai Tokyo Securities, who said some are
looking to shift out of sectors such as retail and into banks and
communications.

As of Tuesday, the banking sub-index (.IBNKS.: ) had been the
second-worst performing sub-index over the past year, having slid
4.6 percent. Only the air transport sector (.IAIRL.T: ) fared
worse, having tumbled 53 percent, while the Nikkei rose 27
percent.

Other market players said banks were also benefiting from
some portfolio rebalancing among domestic investors attracted by
relatively low valuations.

The price-to-book ratio for Mizuho Financial (8411.T: ), for
example, is 1.32 and that of No.3 bank Sumitomo Mitsui Financial
Group (8316.T: ) 1.79. Top lender Mitsubishi UFJ Financial Group
(8306.T: ) has a price-to-book ratio of 1.02.

By contrast, printer and digital camera maker Canon Inc
(7751.T: ) is 2.21 and chip tester maker Advantest Corp (6857.T: ) is
3.01.

Sumitomo Mitsui Financial Group rose 4.2 percent to 3,260 yen
and Mizuho Financial Group gained 2.2 percent to 187 yen.
Mitsubishi UFJ Financial Group rose 2.7 percent to 503 yen.

The banking subindex (.IBNKS.T: ) rose 2.8 percent and was the
biggest gainer among the subindexes, at one point hitting its
highest level in more than 6 months.

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(Additional reporting by Elaine Lies; Editing by Edwina Gibbs)

Nikkei edges up 0.1 pct as bank shares surge