Japanese Shares Rebound as Investors Go on Bargain Hunt
Asian markets climbed Wednesday with Japan's Nikkei surging 5.7% to 9,094. In China the Shanghai Composite Index advanced 1.2% to 2,931 and in Hong Kong the Hang Seng inched up 0.1% to 22,701.
Japanese shares rode the wave higher today as investors scooped up shares in Japanese blue-chip firms that many believe were oversold in the sell-off following Japan's triple disaster that began with Friday's 9.0 magnitude earthquake.
As fires continue to break out at the Fukushima Dai-Ichi nuclear plant about 150 miles from Tokyo, radiation wafted into Tokyo, sending levels rising to about 20 times the normal levels, according to the Japan Times. But traders continued working on the floor of the Tokyo Stock Exchange, trusting reports from the Tokyo Metropolitain Government that the "very small amount" of dangerous chemicals were not high enough to harm humans.
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Among the stocks that soared today were Japanese building material firms like Kobe Steel, which climbed 15% and Asahi Kaisei, with businesses ranging from construction materials to synthetic material and plastic production, which shot up 17.6%. NGK Insulators, a maker of products such as electrical insulation, materials designed to filter exhaust fumes and sewer cleaning equipment, surged 16.4% and Taiheio Cement gained 6.5%.
There was bargain-buying across the board as investors assessed the likely future value of global brands once the nuclear emergency is under control. They bought up shares in everything from electronics to food companies. Fuji Electric racked up an 11% gain, Sony spiked 8.8% and Panasonic advanced 8.4%. Panasonic is reportedly increasing production of batteries, which are in high demand as rolling blackouts have resulted in panic buying of candles, flashlights and batteries.
Among Japanese food producers, beer and beverage maker Kirin Holdings motored up 11.9%, Ajinomoto, whose signature product, MSG, is widely available in Asian grocery stores, rallied 10.3%, Kikkoman rose 5.1%. Japan Tobacco also scored a 12.5% gain.
Car companies were also on the rebound. Toyota (TM) rose 9.1%, despite saying damage from the earthquake would result in a loss in profits of about $72 million per day of lost operations, according to Bloomberg. Toyota has closed 12 factories, but expects to reopen them tomorrow. Toyota parts producer Jtekt zipped up 11.3%. Isuzu climbed 10.5%, Fuji Heavy Industries, the maker of Subaru vehicles, advanced 10.3% and Mazda was up 8.3%. Nissan, which reportedly lost about 2,300 new vehicles in the tsunami and earthquake, rose 6.1%.
Although Tokyo Electric Power, which runs the Fukushima nuclear plant, continued to plunge losing 24.6% in today's trading, other plant builders and nuclear-related companies surged. Hitachi rallied 16.6%, Mitsubishi Corp. rose 10% and Toshiba edged up 2.1%. While nuclear power is suddenly out of favor, the reality is that Japan is a resource-poor nation, and nuclear energy is not likely to be abandoned. It's more likely that nuclear plant developers will have increased business as the country searches for technological solutions to make the plants safer and more disaster-proof. Other power companies also made headway with Kansai Electric Power up 7.2% and Chubu Electric Power up 3.8%.
Chinese mining companies climbed higher with Aluminum Corp. of China surging 10% and Inner Mongolia Baotou Steel Rare-Earth Hi-Tech soaring 7.1%. Jiangxi Copper gained 3.3% and Tongling Nonferrous Metals added 3.2%.
Chinese alternative energy companies got a boost as countries around the world re-consider the safety of nuclear power dependency. China Longyuan Power, a wind farm developer, gained 3.7% and Xinjiang Goldwind Science & Technology advanced 1%. In Hong Kong, solar energy firm China Singyes Solar Technologies saw a 4.8% gain.
Also in Hong Kong bargain hunters moved in profiting from yesterday's selloff . Metals companies rose with Chalco, officially called Aluminum Corp. of China, surging 3.6%, and Jiangxi Copper climbing 1.1%. Hong Kong & China Gas gained 2.5% on higher-than-expected net income.
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