NIKKEI RISE 1.3%, BOOST BY RALLY IN FAST RETAILING (13-apr-2012) - goldennifty.com

                     NIKKEI RISE 1.3%, BOOST BY RALLY IN FAST RETAILING

 

Date: 13/04/2012

Japan's Nikkei average rose on Friday as a rally in Fast Retailing and relief that North Korea's rocket launch ended in failure countered weaker-than-expected GDP figures from China, the world's second-largest economy.

China's annual economic growth slowed to 8.1 percent in the first quarter from 8.9 percent in the last three months of 2011. Economists polled by Reuters had forecast 8.3 percent.

"The China data wasn't that bad," a dealer at an European brokerage said. "It was not as good as expected but still relatively good. Weaker than expected doesn't always mean horrible."

By the midday break, the Nikkei was up 1.3 percent to 9,644.15, after trading around 9,688 before the Chinese data.

The benchmark Nikkei on Thursday ended a seven-session losing streak, its worst run since July 2009.

Fast Retailing jumped 8.4 percent after the leading Asian apparel retailer forecast a record profit for the year ending in August after a strong second quarter.

Both Bank of America Merrill Lynch and Nomura raised their target prices on the retailer and maintained their "buy" rating.

The rally encouraged investors to pick up recently battered cyclicals such as automakers. Toyota Motor Corp, Honda Motor Co Ltd and Nissan Motor Co Ltd gained between 0.8 and 1.1 percent.

Japanese banks climbed 1.8 percent, becoming one of the best sectoral performers on the main board, after Goldman Sachs hiked target prices for Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group.

The three banks rose between 1.6 and 3.2 percent.

"Japanese banks have standout global liquidity from ample deposits ... We think growth in overseas lending would improve profitability and prompt the market to recognize the value of Japanese banks' deposit base," Goldman analysts said in a note.

The broader Topix gained 0.7 percent to 815.44.

Trading volume was robust on the main board after the halfway point, at 65 percent of its full daily average for the past 90 days.

Bucking the trend, Sony Corp sagged 4.8 percent, with market participants voicing concern that the company's revival plan mapped out by new Chief Executive Kazuo Hirai late on Thursday was not enough to turn around the ailing consumer electronics maker.

The Nikkei is down 4.4 percent this month after rallying more than 19 percent in January-March to log its best first quarter performance in 24 years, buoyed by robust U.S. economic data and liquidity boosting programmes by central banks.

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