12 June 2006, 11:12  Tokyo shares close higher on hopes of end to foreign selling; strong revised GDP

Share prices closed the day higher, aided by expectations that heavy selling by foreign investors and speculators is likely to ease this week following the expiry of June futures and options contracts last week, dealers said. Typically the market comes under pressure from sellers in the run-up to the settlement of the contracts. Dealers also noted that better-than-expected revised Jan-March GDP data also provided some relief to the market. However the upside was limited by caution over prospects for Wall Street after last Friday's decline, and ahead of key US data, including May consumer prices on Wednesday, that are likely to provide more clues on the Federal Reserve's rate intentions. The Nikkei 225 Stock Average closed up 82.17 points or 0.6 pct at 14,833.01, while the broader TOPIX index of all first-section issues was up 12.21 points or 0.8 pct at 1,510.89. Gainers led losers 1,321 to 326, with 51 issues unchanged. Volume fell to 904 mln shares from 3.17 bln shares Friday, when turnover was inflated by the special quotation for settling the June futures and options contracts. "We believe that the market, while it remains exposed to performances on Wall Street, will settle down a bit this week, as it has just got through the very worst phase in terms of the deterioration in supply and demand conditions," Shinko Securities equity strategist Tsuyoshi Segawa said, in reference to the special quotation week. He added with the expiry of the contracts out of the way the heavy foreign led selling that has been a feature of recent sessions may now ease.

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