Monday, November 29, 1999

Nikkei books biggest weekly gain in 3 months

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Japan's Nikkei average closed flat on Friday but chalked up a 3 percent gain for the week, its biggest weekly rise in three months, with foreign investors starting to tiptoe back into the market.The benchmark average, which stayed within a sight of a one-month high hit earlier in the week, moved in and out of negative territory throughout the day, with support holding near its 25-day moving average of 9,800.Market players said that as risk avoidance ebbs, the market looks poised to move slowly higher. The Nikkei faces resistance near 10,200, about where the Nikkei's 50-week moving average comes in, and around 10,300, its 200-day moving average."There was talk today that U.S. money may have been buying early this morning, perhaps pension funds, and that foreign selling may have largely run its course last week," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management."The Nikkei may now start to move slowly upwards, particularly as the end of the quarter approaches and investors start to look towards quarterly results."Other analysts said European investors also appeared to be buying a bit on Friday, though trade remained thin.Foreign investors sold a net 916.9 billion yen ($10 billion) of Japanese stocks last week, compared with the 75.2 billion yen they sold in the previous week and the biggest outflow in a single week since March 2008, Finance Ministry data showed."It appears some Europeans may be buying today, with worry about the euro zone debt situation having eased after the Spanish bond auction, which also helped buoy the euro," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities."But given how long it's likely to take to solve all the euro zone problems, uncertainty will remain," he added, noting that it will take some time for foreign investor buying to really recover.A robust response to a Spanish debt auction soothed worries about the country's finances and helped send the euro to a three-week high on Thursday, levels near which it was holding steady on Friday.The benchmark Nikkei ended down 4.38 points at 9,995.02, after earlier inching up 0.3 percent to 10,029.11. That was near a one-month high of 10,109.86 hit on Wednesday.The index has gained about 2 percent so far this month, though it is down more than 5 percent since the beginning of the year, which compares with a 3.5 percent fall in the MSCI Japan Index.The broader Topix slipped 0.3 percent to 884.64 on Friday.Before the 10,200-10,300 resistance levels, a 38.2 percent retracement from the Nikkei's April high of 11,408.17 and its June low of 9,378.23 comes in around 10,156.Some analysts say a break above 10,200-10,300 could take the Nikkei quickly up to 10,500.Trade was thin on the Tokyo exchange's first section, with 1.6 billion shares changing hands, near a four-month low just below 1.5 billion shares marked early this week.Advancing shares outnumbered declining ones, 827 to 705.CONSUMER LENDERS SLIDEShares of consumer lenders such as Promise Co slid as new regulations came into effect, including rules limiting how much debt a customer can take on.The firms, once incredibly popular with foreign investors, have already been hit both by regulations that lowered the maximum interest rate they can charge and court rulings forcing them to repay past interest deemed illegally high.Promise dropped 6.1 percent to 648 yen, Takefuji Corp tumbled 7.6 percent to 279 yen and Acom Co declined 5.6 percent to 1,129 yen. Aiful Corp lost 5.2 percent to 127 yen.NGK Insulators slid 3.7 percent to 1,551 yen after Credit Suisse cut its target price on the maker of insulators for power utilities and maintained its "underweight" rating, citing falling business momentum."We believe the stock remains overvalued on valuation comparisons with rival companies," wrote analyst Shinya Yamada.Chip-linked shares edged higher after Apple Inc touched a lifetime high of $272.90 a day after saying it sold more than 600,000 units of its new iPhones.Chip tester maker Advantest Corp rose 0.2 percent to 1,998 yen and Tokyo Electron rose 0.5 percent to 5,690 yen.(Editing by Chris Gallagher)(For more business news on Reuters India click
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