(Bloomberg) -- Japanese stocks jumped to a three- month high on speculation consolidation will boost profitability in the computer chip industry and after a U.S. Federal Reserve survey showed economic contraction eased in some regions.
Mitsubishi Electric Corp. jumped 4 percent after its Renesas Technology Corp. affiliate was said to be in merger talks with NEC Electronics Corp., Japan’s third-biggest chipmaker. Nissan Motor Co., the nation’s No. 3 carmaker, rose 3.7 percent as almost half of the regions surveyed in the Fed’s Beige Book said there’s been a “moderation” in economic decline. Steelmakers and shipping lines gained ahead of reports from China on gross domestic product, production and inflation.
The Nikkei 225 Stock Average rose 253.43, or 2.9 percent, to 8,996.39 at the 11 a.m. break in Tokyo, the highest since Jan. 7 and snapping a three-day slide. The broader Topix index gained 16.67, or 2 percent, to 851.92.
“It’s natural when the economy turns south to see these kinds of mergers as a strategy for survival. Making money in semiconductors is difficult in any business climate,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion. “We aren’t on the path to a legitimate recovery, but we are seeing signs that sentiment is improving.”
The Nikkei has rallied by more than a quarter from a 26- year low on March 10. Shares in the gauge trade at an average of 183 times estimated net income for this year, up from 14 times a year ago, according to index compiler Nikkei Inc.
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