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Japans Nikkei share average rose on Tuesday as tech shares rallied

2018-05-08 07:01 am | Resource: NEWS | No Views : 183

Japan’s Nikkei share average rose on Tuesday as tech shares rallied and Takeda Pharmaceutical jumped after a report the drugmaker will make a formal offer to buy Shire for $62 billion.

The Nikkei gained 0.4 percent to 22,551.35 points by mid-morning.

Takeda Pharmaceutical gained 2 percent and was the third most traded stock in turnover after trading in negative territory.

The Nikkei reported that the drugmaker will make a formal offer to buy Irish drugmaker Shire for 46 billion pounds ($62.3 billion) in cash and stock on Tuesday.

Takeda later said negotiations are continuing, and it will make an announcement when it reaches an agreement.

With more companies reporting full-year earnings, individual stocks will likely provide catalysts market action this week and next, traders said.

About 40 percent of the Topix companies that have reported so far have topped profit estimates, according to Mizuho Securities. The companies reported a 21.4 percent rise in pretax profits for the last fiscal year ended March 2018, compared to the companies’ earlier estimates of 16.5 percent.

For outlooks for this fiscal year, they have reported a 2.2 percent rise in pretax profits, as most companies have weaker dollar-yen assumptions than last year.

“As companies are forecasting conservative profits this year, the stock market has a hard time digesting the forecasts,” said Nobuhiko Kuramochi, a strategist at Mizuho Securities. “We need to wait until the April-June quarter to get a more concrete picture on how companies will be performing throughout the year.”

Tech shares outperformed, with Kyocera rising 1.2 percent and TDK gaining 0.9 percent.

Banks were also higher, with Mitsubishi UFJ Financial Group advancing 1.2 percent and Mizuho Financial Group adding 0.9 percent.

Meanwhile, Suruga Bank, whose shares have dropped 41 percent this year in connection with loans it made to customers for housing investment, dived more than 8 percent.

The Asahi Shimbun reported that a group of lawyers representing owners who can’t repay their loans released a voice data showing the bank’s involvement in approving loans based on falsifying documents.

The Financial Services Agency (FSA) in March ordered the bank to report on loans it made to retail customers who built so called share houses, where tenants share bathrooms and other facilities.

The broader Topix gained 0.6 percent to 1,782.94

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