Nikkei Surges as Investors Take Cover in Japan's Cheap Stocks


Asian markets rebounded Thursday. In Japan the Nikkei 225 Index jumped 2.1% to 10,014 and in Hong Kong the Hang Seng Index rose 1.8% to 23,637. China's Shanghai Composite gained 0.9% to close at 2,865.

Japanese investors were jubilant today as the Nikkei 225 Index broke the 10,000 mark for the first time since June. While it's still far below its nearly 40,000 level of the 1980s boom days, some say it could signal a change in sentiment with money flowing away from topped-out Chinese investments, and into discounted Japanese equities with higher growth opportunity. "Investors will shift to Japanese stocks, which have lagged behind other markets, particularly from those in other Asian countries that have advanced too far," a money manager from Ichiyoshi Investment Management told Bloomberg.

Today Japanese financial companies led the way with Resona Holdings soaring 9.2%, Shinsei Bank racking up a 7.1% gain and Mizuho Securities jumping 7%.

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Electronics makers also gained with camera companies rising: Olympus surged 2.8%, Nikon and Konica Minolta both gained 1.5% and Canon rose 1.3%. Sony, maker of the Playstation 3, climbed 2.2%, but Nintendo, slid 0.2% -- not surprising considering the recent release of the hands-free Xbox Kinect, a major challenger to Nintendo's Wii. But a lot of the Kinect demand could be hype. The London Evening Standard reported that lines 100-people long were forming outside gaming stores for the new device, with Microsoft's Stephen McGill saying, "We're manufacturing as fast as we can." But after a quick search of local suppliers, the product was in stock and ready to ship when purchased online.

Square Enix Holdings, a Japanese game publisher that's teamed up with Microsoft to design games for the Xbox jumped 1.8%. And among companies supplying the electronics makers, Showa Denko K.K. rocketed up 6.3% on a new "buy" rating from UBS and Advantest, a maker of electronic measuring instruments advanced 2.2%.

Hong Kong Commodities Recover

In Hong Kong, recovering commodities pushed the index higher after news spread that Chinese officials are now considering only temporary price caps on items that have been hit by sky-high inflation thanks to speculating and hoarding. Coal companies advanced with China Coal rising 2.4% and Shenhua Energy adding 1.1%. Among oil producers Cnooc rocketed up 4.9% and PetroChina edged up 0.5%. Aluminum Corp. of China, also known as Chalco, leaped 2.9%.

Among companies rebounding from heavy losses earlier this week, Tencent, an Internet gaming company operating in China rallied 4.9% and some real estate firms with massive developments in China also gained. New World Development and Cheung Kong both climbed 1.6% and China Overseas added 0.9%.

In China, airline shares rose with China Eastern Airlines soaring 2.7%, Air China advancing 2.6% and China Southern Airlines gaining 2.2%. Commodities followed the London Metals Exchange higher with Zijin Mining shooting up 5.9% and Jiangxi Copper advancing 2.9%.