Comments
Japanese stocks briefly hit a two-week high on Monday morning, led by oil-related shares on rebounding crude prices and as Showa Shell Sekiyu surged over 25 per cent on a media report of an impending takeover bid.
The benchmark Nikkei share average rose as high as 17,692.58, the best level since December 9, before erasing gains to stand at 17,621.66 by the mid-day break, almost flat from Friday close.
Oil-related shares led the rally, with the oil and coal products’ companies sub-index jumping 7.7 per cent to become the best performing sector on the main board.
US crude futures rose to near $57.50 a barrel in early Asian trade on Monday, extending a rise helped by profit-taking on short positions.
Showa Shell spurts
Oil refiner Showa Shell Sekiyu was the highlight of the session, surging 25.6 per cent after media reported that the oil refiner was in talks to be acquired by a larger rival, Idemitsu Kosan Co Ltd, for up to 500 billion yen ($4.2 billion) in a deal that could create Japan’s second largest player in the domestic gasoline market.
“Hopes are high for industry restructuring and this provides broad support for related stocks,’’ said Yasuo Sakuma, portfolio manager at Bayview Asset Management.
Showa Shell was the fifth-heaviest traded stocks by turnover on the Topix. Idemitsu Kosan gained 4.8 per cent. JX Holdings Inc, the industry leader, gained 6.2 per cent and Cosmo Oil Co Ltd soared 16.6 per cent.
Japan’s top oil and gas explorer Inpex Corp gained 3.5 per cent after oil prices bounced back from multi-year lows.
Profit-taking
Some profit-taking weighed on the market as the Nikkei gained more than 800 point, or nearly 5 per cent, in the previous three sessions.
Trading was slower than usual as many offshore players were on holidays ahead of Christmas, leaving domestic traders as the main players. Japanese markets will be closed on Tuesday for a public holiday.
The broader Topix added 0.1 per cent, while the new JPX-Nikkei Index 400 also rose 0.1 per cent. Some traders called on domestic investors to play a more active role in Japan's stock market.
Foreign players account for about 70 per cent of market volume. “Japanese stock markets depend too heavily on foreign investors. We need Mrs. Watanabe to buy Japanese equities in order to push the markets on to the next level in 2015,’’ said Kathy Matsui, chief Japan strategist at Goldman Sachs. ($1 = 119.5500 yen)
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.