Tokyo stocks close 1.95pc higher

May 13, 2014 - 9:32:08 am

TOKYO: Tokyo stocks closed 1.95 percent higher on Tuesday, boosted by record-setting advances on Wall Street and a decent run of earnings at home.

The Nikkei 225 index soared 275.92 points to 14,425.44, while the Topix index of all first-section issues was up 1.77 percent, or 20.44 points, at 1,178.35.

"There was selective buying of stocks after companies announced good earnings results, but overall (Tuesday's rise) is thanks to the higher US stock prices," said Kenji Shiomura, strategist at Daiwa Securities.

"Japanese stocks are still undervalued and it's no wonder that they are being bought back," he said.

Shiomura said the market might lack a major catalyst for a further boost in the coming weeks until Prime Minister Shinzo Abe unveils a new growth strategy in June.

Nissan Motor was one of the biggest winners of the day, jumping 5.06 percent to 913 yen by the close after a robust earnings announcement on Monday.

Japan's second-biggest automaker said full-year net profit jumped 14.0 percent, driven by a recovery in major markets, cost-cutting efforts and the weaker yen.

Mitsubishi Chemical Holdings rose 2.23 percent to 412 yen on a news report that it plans to acquire a majority stake in Japanese industrial gas company Taiyo Nippon Sanso to harness US demand for nitrogen and other gases fuelled by the shale gas boom.

Sure enough, after the market closed Mitsubishi Chemical announced it would launch a tender offer for shares in Taiyo Nippon to boost its group's stake to a maximum 51 percent from the current 27 percent.

Mitsubishi Chemical offered to pay 1,030 yen for each Taiyo Nippon share, a 26 percent premium on the stock's average closing price for the past one month.

The purchase would cost Mitsubishi Chemical more than 100 billion yen ($970 million).

Taiyo Nippon shares jumped 10.84 percent to end at 889 yen on Tuesday.

The dollar rose to 102.30 yen in late afternoon Tokyo trade from 102.09 yen in New York Monday afternoon.

The Dow and S&P 500 closed Monday at fresh record highs, spurred by a strong rally in technology stocks that lifted the Nasdaq.

The Dow rose 0.68 percent, the S&P 500 gained 0.97 percent and the Nasdaq added 1.77 percent. (AFP)