LEAD: Tokyo stocks rebound on resource gains, China recovery hopes.
TOKYO, June 24 Kyodo (EDS: ADDING DETAILS AND PRICES) Tokyo stocks rebounded Wednesday, buoyed by gains in resource shares and rallies in other Asian markets on hopes for China's economic recovery, although caution ahead of U.S. data and Federal Reserve announcements capped gains. The 225-issue Nikkei Stock Average gained 40.71 points, or 0.43 percent, to 9,590.32 from Tuesday, when it dropped almost 3 percent to a one-month closing low. The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 0.77 point, or 0.09 percent, to 902.46, erasing morning losses. Nonferrous metals, oil and coal products, and precision machinery issues led the gains. Major decliners included real estate, consumer finance and retail issues. The market ended morning trading in negative territory, despite gains on bargain-hunting from the previous day's decline and resource issues from higher commodity prices. But stocks turned upward in the afternoon on upbeat news on China and relief from the stabilization of the U.S. dollar above the 95 yen line, brokers said. Citing Chinese media reports of a rise in China's power generation in June, Mizuho Securities Co. equity strategist Tsuyoshi Segawa said, ''Such news indicating that production activities are picking up at last drove up Asian markets, especially in Taiwan and Hong Kong...As a result, some buying in Tokyo kicked in as well to test market reaction.'' The Taiwan Capitalization Weighted Stock Index rose about 3 percent while Hong Kong's Hang Seng Index was up more than 1 percent by midday. Meanwhile, Wednesday's gains remained small relative to the previous day's sharp pullback, brokers said. ''Investors are awaiting announcements by the U.S. Federal Open Market Committee later Wednesday for clues about the U.S. interest rate outlook as well as key U.S. data such as May new home sales,'' said Hiroichi Nishi, equity division general manager at Nikko Cordial Securities Inc. On the domestic front, the Finance Ministry said Japan's trade surplus in May showed that the pace of decline in exports has become moderate, but the latest data showed that the nation's economic activity is not yet gaining strong momentum. ''Recent rallies that took the Nikkei past the 10,000 mark on June 12 were based mostly on expectations for recovery and there is a gap between stocks' performance and the real economy,'' Nishi said. ''Investors are now locking in profits as they try to see more clearly whether the market has really hit bottom at the 9,500 line.'' Similarly, Mizuho's Segawa said Tokyo stocks are expected to continue to go back and forth, fluctuating in a narrow range in the near term. On the First Section, advancing issues slightly outnumbered declining issues 816 to 750, with 134 others remaining unchanged. Showa Shell Sekiyu jumped over 6 percent, adding 60 yen to 1,043 yen. The oil distributor announced in the morning it will engage in a joint solar power project with Saudi Arabian Oil Co. Among other gainers in resource-related issues, Japan Petroleum Exploration advanced 160 yen, or more than 3 percent, to 4,950 yen, while trading house Mitsubishi rose over 1 percent. Meanwhile, battery maker GS Yuasa, the day's value leader, lost 42 yen, or over 4 percent, to 928 yen after recent gains. Volume leader Mizuho Financial Group was down 2 yen, or about 1 percent, to 237 yen. Toray Industries, which supplies carbon fiber material for Boeing Co.'s 787 Dreamliner, shed 6 yen, or over 1 percent, to 454 yen after Boeing once again postponed the plane's inaugural flight. Trading volume on the main section came to 2,114.60 million shares, down from Tuesday's 2,532.87 million. The TSE's Second Section index was up 6.79 points, or 0.32 percent, to 2,158.90 on a volume of 54.80 million shares. On the Osaka Securities Exchange, the near-term September Nikkei 225 index futures contract was up 30 points to 9,570. |