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Equities clolse well ahead

in Tokyo

TOKYO: Stocks ended well ahead, propelled by feverish buying of high-tech stocks and arbitrage-linked purchases, brokers said. The 225-share Nikkei average soared 287.87 points or 1.61 percent to 18,135.16, to end above 18,000 for the first time in a week.

The index moved within a 18,185.10 to 17,825.33 range. Volume swelled to an estimated 450 million shares.

"NTT 9432.T led the market higher on expectations that the second supplementary budget will include a substantial increase in spending on information network technology," said Kazumi Shimokawa, head of equities at New Japan Securities.

Turnover on the first section was a solid improvement on Monday's meagre 246 million shares.

"A close above 18,000 confirms that foreigners are in the market big time," said Roland Hinterkoerner, a salesman at Deutsche Bank Capital Markets.

Indeed, foreign investors and domestic brokerages were cited as active buyers of semiconductor-related firms such as Tokyo Electron 8035.T, Advantest 6857.T, Oki Electric 6703.T, and Toshiba 6502.T. Tokyo Electron rose 220 yen to 3,920, Advantest gained 440 to 5,630, most active Oki soared 31 yen to 835 and Toshiba swelled 24 yen to 714.

Demand for these stocks was rekindled today by a Nihon Keizai Shimbun report saying profit growth at Hitachi 6501.T and Toshiba would accelerate because of strong demand for semiconductors.

The buying of telecommunications stocks was triggered by comments by Finance Minister Masayoshi Takemura during the midday break. He said that a new package of economic stimulus measures to be announced around September 20 would emphasise information network technology and public works spending and would be funded by a second supplementary budget due to be submitted to parliament in early October.

The TOPIX index closed the day ahead 20.17 points or 1.43 percent at 1,433.46, and the Nikkei 300 gained 3.91 points or 1.49 percent to 266.44. In futures, the key Nikkei 225 September contract added on 250 points to 18,160 with 31,869 contracts traded. Traders said the strengthening of the dollar into the 97 yen level encouraged dealers to cover their shorts.

Dealers and individual investors focused on speculative issues. Sumitomo Coal 1503.T soared 61 yen or 12.73 percent to 540 yen, and Clarion 6796.T rose 37 yen or 8.92 percent to 452. But Japan Mtl & Chem 5562.T shares slumped 18 yen to 662 after earlier rising as high as 707 yen.

Over the long term, brokers said they expect Japan's economy and stock market to benefit from a stronger LDP under Hashimoto's leadership, as they feel Hashimoto will put more emphasis on activating Japan's economy.

On the first section, gaining issues overwhelmed decliners with 827 rising, 224 falling and 127 unchanged by the close.

The strongest sectors were headed by mining, real estate, brokerages, services, non-ferrous metals, electricals, shipbuilding, telecommunications, precision instruments, and machinery. -Reuter