Japanese stocks advanced, led by Fanuc Ltd. and Kyocera Corp., after a government report showed machinery orders in April rose more than economists expected. ``These are great numbers,'' said Yasumasa Nishimura, a senior fund manager at Dai-Ichi Kangyo Asset Management Co., who manages the equivalent of $182 million in Japanese equities. ``Machinery companies are still being conservative in their investment plans and we still get these sort of results. The stocks still have room to trade higher.''
The Nikkei 225 Stock Average added 1.2 percent to 11,588.55 at the 3 p.m. close in Tokyo. The Topix index rose 0.8 percent to 1162.06, paced by consumer finance companies, after Sumitomo Mitsui Financial Group Inc. said it may buy a stake in Promise Co., Japan's No. 4 consumer lender. Elsewhere in the region, computer-related stocks dropped. Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. led declines after a slide in the Nasdaq Composite Index underscored concern the prospect of higher U.S. interest rates will slow earnings growth. The Morgan Stanley Capital International Asia-Pacific Index, which tracks more than 900 stocks in the region, was little changed at 89.71. Taiwan's Taiex Index dropped 1.7 percent to 5867.51, the worst performing index in the region. All other benchmarks in Asian markets fell, except those in Singapore and Thailand.
Fanuc, Kyocera
Japan's machinery orders jumped 11.8 percent seasonally adjusted, from March, the Cabinet Office said, as companies planned to increase investment in factories and equipment to meet rising overseas demand for electronics goods. The gain in machinery orders beat by fivefold the median 2.3 percent gain in a Bloomberg News survey of 32 economists and exceeded all estimates. Fanuc, the world's largest maker of industrial robots, rose 3.1 percent to 6,400 yen. Kyocera, the world's biggest maker of ceramic packaging for chips, added 1.1 percent to 9,140 yen. Promise advanced 2.6 percent to 7,510 yen. Sumitomo Mitsui, Japan's third-largest lender, said it may buy a stake in the company. Sumitomo Mitsui rose 0.5 percent to 774,000 yen. The bank will spend about 150 billion yen ($1.4 billion) to acquire an 18 percent stake in Promise, the Nihon Keizai newspaper reported earlier.
More Acquisitions
The planned alliance comes after Mitsubishi Tokyo Financial Group Inc., Japan's second-biggest lender, said in March it will raise its stake in Acom Co., the nation's second-ranked consumer lender, to 15 percent. Acom added 1.2 percent to 7,600 yen. ``There could be more acquisitions for banks and consumer-finance companies to improve their businesses,'' said Hiroshi Hashimoto, who helps manage the equivalent of $7.1 billion at Fukoku Capital Management Inc. in Tokyo. The Topix Insurance Index had the biggest percentage gain among the 33 industry subgroups in the Topix, jumping 5.8 percent. All nine insurers advanced.
Sompo Japan Insurance Inc., the nation's third-largest non-life insurer by premium income, surged 8.8 percent to 1,089 yen. Mitsui Sumitomo Insurance Co., the second largest, rose 6.3 percent to 1,071 yen. ``With concerns over the possibility of an interest rate hike and a slowdown in the U.S. economy, people are focused on domestic companies,'' said Yusuke Sakai, a manager at Mizuho Securities Co.'s equity department.
Worsening Sentiment
Samsung Electronics, the world's second-largest semiconductor maker after Intel Corp., dropped 3.1 percent to 468,000 won. Taiwan Semiconductor, the world's largest supplier of made-to-order chips, fell 3.6 percent to NT$53. Chi Mei Optoelectronics Corp., Taiwan's second-largest flat-panel display maker, slumped 5.2 percent to NT$54.50. The Nasdaq, which gets 40 percent of its value from computer-related shares, lost 1.6 percent, its biggest drop since April 30. ``The Nasdaq's slide worsened investor sentiment about technology shares as there were already concerns higher interest rates will raise borrowing costs and cut earnings growth,'' said Kim Kyeong Seob, who helps manage about $690 million at KB Investment Trust management Co. in Seoul. ``I've recently reduced some of my holdings in the technology industry,'' Kim said. The Standard & Poor's 500 Index fell 1 percent, its steepest decline since May 17. S&P 500 members are forecast to boost earnings by 19.7 percent in the second quarter, according to analysts surveyed by Thomson Financial. That's less than the growth of 27.5 percent in the first quarter. For 2004, analysts estimate 18.1 percent expansion, down from 18.3 percent in 2003, Thomson said.
U.S. Federal Reserve Chairman Alan Greenspan said earlier this week policy makers are ready to boost interest rates and would accelerate the pace of increases if inflation picks up. ///www.bloomberg.com