Japan Stocks Rally on Bank-Recovery Optimism; Toshiba SoarsMarch 11 (Bloomberg) -- Japanese stocks rallied after Citigroup Inc. said it had a profit in the first two months of this year, triggering speculation a recovery of the global financial system is in sight.
Mizuho Financial Group Inc., the Japanese bank with the biggest subprime writedowns, gained 5.4 percent, following a worldwide rebound in equities. Mitsubishi UFJ Financial Group Inc. advanced 4.1 percent, even after a real estate company to which it lent money became Japan’s third-biggest bankruptcy this year. Toshiba Corp. leapt 9.5 percent on a newspaper report it may return to profit next fiscal year.
The Nikkei 225 Stock Average jumped 321.14, or 4.6 percent, to close at 7,376.12 in Tokyo, the biggest gain since Jan. 27. The broader Topix index added 18.78, or 2.7 percent, to 722.28, with three stocks rising for each that slumped.
The Nikkei’s constituents traded at 0.81 times their corporate net worth as of yesterday, the lowest level on record dating back to July 1989, according to Nikkei Inc. The price-to- book ratio indicates the stocks are undervalued, Hiroichi Nishi, an equities manager at Nikko Cordial Securities Inc., said in an interview with Bloomberg Television.
Nikkei futures expiring in March added 5 percent to 7,390 in Osaka and gained 4.6 percent to 7,370 in Singapore.
Technical Analysis:
The 5, 10, 20 day MA was shown to correcting lower, that should told us Nikkei 225 in still bearish mode (MACD in a negative teritorial, eventhough a sharp rally today was caused by an oversold stochastic & doji star candle in daily charts should lift the index to 7,500/7,550 before going down once again to below 7,000 in any time soon. Resistance for 12/03 at 7,510, support 7,290. (Andri Zakarias Siregar).
HK Shares End Up For 2nd DayHONG KONG (Dow Jones)--Wall Street's overnight strength and gains in financial firms after Citigroup said it was profitable in the first two months helped reassure investors, sending Hong Kong's benchmark index higher for a second consecutive session Wednesday. The Hang Seng Index rose 236.61 points, or 2.02%, to 11,930.66 after trading between 11,904.61 and 12,228.22. Turnover rose to HK$44.72 billion from HK$33.49 billion Tuesday. The index is likely to face pressure in the near term because of the weak global economy and disappointing corporate earnings, analysts said. Phillip Asset Management portfolio manager Y.K. Chan said he expects the rally to be short-lived, adding the Hang Seng Index will likely meet resistance at 12,500 soon after. The blue-chip index has gained 5.2% in the past two sessions after sliding 4.8% Monday. 'We think sentiment is unlikely to improve shortly as investors expect disappointing results from blue-chip companies in the midst of the economic downturn,' Chan said. The local market was boosted by the Dow Jones Industrial Average's 5.8% gain overnight, its biggest point and percentage gain since late November, led by a rally in financial stocks. Citigroup's surge on Wall Street overnight also lifted general sentiment in local financial stocks, traders said. HSBC shares continued to rally for a second consecutive day Wednesday, ahead of the stock going ex-rights Thursday. HSBC Asia Pacific Chief Executive Sandy Flockhart said shareholders have responded 'extremely well' to the bank's US$17.7 billion rights issue plan, and his positive comments on the bank's operation outlook helped boost investors' confidence in the bank, traders said.
Technical Analysis
The short trend is still bearish, becaused all MA's indicators was in bearish mode & pointing lower, MACD still in a bearish teritory, stochastic even in an oversold condition, could manage lead the index to have lower low any time soon. AS long as index could not hold above 12,180 (higher low) in 2 day closing, target still 11,450/11,500 maybe 10,670 (6 months's low)any time soon. But if index could hold above that level, index should tick higher to 12,500. Resistance 12,230, support 11,900/11,695. (Andri Zakarias Siregar).
