By Patrick Rial
Oct. 18 (Bloomberg) -- Japanese stocks climbed, led by financial shares, after JPMorgan Chase & Co.'s profit beat analyst estimates, bucking a recent trend of worsening earnings due to subprime investments at banks including Citigroup Inc. and Wells Fargo & Co.
Mitsubishi UFJ Financial Group Inc. and Nomura Holdings Inc. rose for the first time in seven days.
Mitsubishi Corp. led trading and shipping companies higher after India's market recovered from a rout, easing concern capital controls will slow one of the world's fastest-growing economies.
``The fall yesterday can be attributed to outside factors such as India and renewed worries about the subprime loan problem, but the outlook is for a reversal today,'' said Mitsushige Akino, who oversees $468 million at Ichiyoshi Investment Management Co. in Tokyo. ``Shipping lines, steel producers and trading houses all present buying opportunities.''
The Nikkei 225 Stock Average added 64.46, or 0.4 percent, to 17,019.77 as of 9:39 a.m. in Tokyo. The broader Topix index gained 8.72, or 0.5 percent, to 1,609.01.
Gains were limited after the International Monetary Fund lowered its economic growth forecasts for Japan in 2007 and 2008.
Mitsubishi UFJ, the country's biggest publicly traded bank, surged 41 yen, or 4 percent, to 1,058. Nomura, Japan's largest brokerage, rose 32 yen, or 1.6 percent, to 1,987. Sumitomo Mitsui Financial Group Inc., the third-largest publicly traded lender, jumped 28,000 yen, or 3.4 percent, to 851,000.
Mitsubishi slumped 4 percent yesterday, while Nomura tumbled the most in four weeks after Wells Fargo said on Oct. 16 it lost almost $900 million on home equity and consumer loans.
JPMorgan, the third-biggest U.S. bank, said yesterday third-quarter net income rose 2.3 percent to $3.4 billion, exceeding analysts' estimates.
Growth Estimate Cut
``Our mortgage share in both home equity and prime mortgage and subprime is going to go up pretty substantially,'' Jamie Dimon, the company's chief executive officer, said yesterday. ``We love the business.''
Mitsubishi Corp., Japan's largest trading company by market value, gained 80 yen, or 2.2 percent, to 3,770. Mitsui O.S.K. Lines Ltd., the nation's No. 2 shipping line operator, rose 47 yen, or 2.4 percent, to 1,977. Mitsui & Co., the second-largest trading house, jumped 85 yen, or 2.9 percent, to 2,995.
Indian stocks lost more than $100 billion in market value at one point yesterday, with the benchmark Sensitive Index dropping as much as 9.2 percent. The gauge recovered to close 1.8 percent lower after Tokyo's market had already shut. The Topix slid 1.5 percent.
Growth Forecast Cut
A proposal from the Securities & Exchange Board of India that would end the trading of derivatives known as participatory notes sparked a rout in the local market. Losses were pared after India's government said it does not intend to ban the instruments.
Elsewhere, the IMF slashed its forecast for growth in Japan to 2 percent from 2.6 percent for the current year and to 1.7 percent from 2 percent for 2008.
``Risks to the outlook appear tilted somewhat to the downside at this stage,'' the group said in its semiannual economic outlook released yesterday. ``While faster wage growth could boost consumption spending, growth would be dampened by a more significant downturn in the global economy.''
Mitsubishi UFJ and Sumitomo Mitsui also rose after five people with knowledge of the transaction said the companies and Credit Saison Co. may bid for Japan Airlines Corp.'s credit card unit, according to a Bloomberg report.
Credit Saison, Japan's largest credit card provider by market value, advanced 30 yen, or 1 percent, to 3,180.
Nikkei futures expiring in December rose 0.4 percent to 17,050 in Osaka and gained 0.4 percent to 17,050 in Singapore.
To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net .
By Patrick Rial
Oct. 18 (Bloomberg) -- Japanese stocks climbed, led by financial shares, after JPMorgan Chase & Co.'s profit beat analyst estimates, bucking a recent trend of worsening earnings due to subprime investments at banks including Citigroup Inc. and Wells Fargo & Co.
Mitsubishi UFJ Financial Group Inc. and Nomura Holdings Inc. rose for the first time in seven days.
Mitsubishi Corp. led trading and shipping companies higher after India's market recovered from a rout, easing concern capital controls will slow one of the world's fastest-growing economies.
``The fall yesterday can be attributed to outside factors such as India and renewed worries about the subprime loan problem, but the outlook is for a reversal today,'' said Mitsushige Akino, who oversees $468 million at Ichiyoshi Investment Management Co. in Tokyo. ``Shipping lines, steel producers and trading houses all present buying opportunities.''
The Nikkei 225 Stock Average added 64.46, or 0.4 percent, to 17,019.77 as of 9:39 a.m. in Tokyo. The broader Topix index gained 8.72, or 0.5 percent, to 1,609.01.
Gains were limited after the International Monetary Fund lowered its economic growth forecasts for Japan in 2007 and 2008.
Mitsubishi UFJ, the country's biggest publicly traded bank, surged 41 yen, or 4 percent, to 1,058. Nomura, Japan's largest brokerage, rose 32 yen, or 1.6 percent, to 1,987. Sumitomo Mitsui Financial Group Inc., the third-largest publicly traded lender, jumped 28,000 yen, or 3.4 percent, to 851,000.
Mitsubishi slumped 4 percent yesterday, while Nomura tumbled the most in four weeks after Wells Fargo said on Oct. 16 it lost almost $900 million on home equity and consumer loans.
JPMorgan, the third-biggest U.S. bank, said yesterday third-quarter net income rose 2.3 percent to $3.4 billion, exceeding analysts' estimates.
Growth Estimate Cut
``Our mortgage share in both home equity and prime mortgage and subprime is going to go up pretty substantially,'' Jamie Dimon, the company's chief executive officer, said yesterday. ``We love the business.''
Mitsubishi Corp., Japan's largest trading company by market value, gained 80 yen, or 2.2 percent, to 3,770. Mitsui O.S.K. Lines Ltd., the nation's No. 2 shipping line operator, rose 47 yen, or 2.4 percent, to 1,977. Mitsui & Co., the second-largest trading house, jumped 85 yen, or 2.9 percent, to 2,995.
Indian stocks lost more than $100 billion in market value at one point yesterday, with the benchmark Sensitive Index dropping as much as 9.2 percent. The gauge recovered to close 1.8 percent lower after Tokyo's market had already shut. The Topix slid 1.5 percent.
Growth Forecast Cut
A proposal from the Securities & Exchange Board of India that would end the trading of derivatives known as participatory notes sparked a rout in the local market. Losses were pared after India's government said it does not intend to ban the instruments.
Elsewhere, the IMF slashed its forecast for growth in Japan to 2 percent from 2.6 percent for the current year and to 1.7 percent from 2 percent for 2008.
``Risks to the outlook appear tilted somewhat to the downside at this stage,'' the group said in its semiannual economic outlook released yesterday. ``While faster wage growth could boost consumption spending, growth would be dampened by a more significant downturn in the global economy.''
Mitsubishi UFJ and Sumitomo Mitsui also rose after five people with knowledge of the transaction said the companies and Credit Saison Co. may bid for Japan Airlines Corp.'s credit card unit, according to a Bloomberg report.
Credit Saison, Japan's largest credit card provider by market value, advanced 30 yen, or 1 percent, to 3,180.
Nikkei futures expiring in December rose 0.4 percent to 17,050 in Osaka and gained 0.4 percent to 17,050 in Singapore.
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