Tuesday, December 25, 2007

Japanese Stocks Rise for Third Day; Mitsubishi UFJ Leads Banks

By Patrick Rial

Dec. 25 (Bloomberg) -- Japanese stocks rose for a third day, led by financial shares, after a decline in interbank borrowing costs signaled a global credit-market slump is easing.

``The chaos in short-term financing markets has calmed down,'' said Mitsushige Akino, who oversees $468 million in assets at Ichiyoshi Investment Management Co. in Tokyo.

Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. gained the most in two weeks after the London interbank offered rate, a global benchmark, dropped to the lowest since March 2006.

The U.S. market and European bourses, except in Russia, are shut today for Christmas. U.S. stocks rose yesterday, sending benchmark indexes to the highest in two weeks, as falling interest rates and a $33.3 billion agreement to restructure Canadian commercial debt improved the credit-markets outlook.

Benchmark indexes increased in Israel and Egypt today and declined in Russia, Saudi Arabia and Turkey.

The Nikkei 225 Stock Average rose 295.59, or 1.9 percent, to 15,552.59 at the close in Tokyo. It has fallen 9.7 percent so far in 2007. The broader Topix index added 26.83, or 1.8 percent, to 1,496.03.

Mitsui & Co., which generates most of its profit from commodities trading, had its steepest gain this month after crude oil advanced to a two-week high.

The total value of shares traded in Tokyo was 1.73 trillion yen ($15.1 billion), the first time since Christmas Day, 2006, that the total was below 2 trillion yen on a full day.

Borrowing Costs

Elsewhere in Asia, indexes climbed in China, Taiwan and Thailand, while Vietnam fell.

In Russia, the ruble-denominated Micex Index declined 0.5 percent to 1,920.21 at 12:23 p.m. in Moscow. The dollar- denominated RTS Index dropped 0.2 percent to 2,298.43.

Saudi Arabia's Tadawul All Share Index lost 0.5 percent to 11540.15 at 12:30 p.m. local time. Egypt's CASE 30 Index added 0.4 percent. Israel's benchmark TA-25 Index rose 0.4 percent to 1,228.26 at 11:26 a.m. in Tel Aviv. The ISE National 100 Index fell 255,17, or 0.4 percent, to 55,307.28 in Istanbul.

The U.S. market will be open tomorrow and most bourses in Europe will remain closed for a second day.

The Standard & Poor's 500 Index climbed 3 percent the last three trading days, trimming its fourth-quarter drop to 2 percent, after a concerted effort by central banks in North America and Europe helped push down borrowing costs. The benchmark for American equities has advanced 5.5 percent this year and is headed for its fifth straight annual gain.

Annual Increase

Concern tighter credit markets may slow U.S. economic growth has pushed stocks lower this quarter. The S&P 500 and Europe's Dow Jones Stoxx 600 Index may post their first fourth- quarter decline since 2000. The Dow Jones Stocks 600 Index has dropped 3.5 percent since the end of September.

The MSCI Asia-Pacific Index is still on pace for its fifth straight annual increase. Asia's regional gauge has added 10 percent in 2007.

Mitsubishi UFJ, Japan's biggest publicly traded bank by assets, surged 39 yen, or 3.8 percent, to 1,080, its sharpest gain since Dec. 6. Mizuho, No. 2 in Japan, rose 20,000 yen, or 3.7 percent, to 557,000.

Sumitomo Mitsui Financial Group Inc., the third-largest, climbed 30,000 yen, or 3.6 percent, to 869,000. A gauge of banks contributed the most to the Topix index's advance today out of the 33 industry groups.

Investor Confidence

Financial companies also advanced after Merrill Lynch & Co. said yesterday it will get as much as $6.2 billion in new capital, boosting investor confidence in the outlook for banks.

Mitsui & Co. climbed 110 yen, or 4.8 percent, to 2,415, its steepest rally since Nov. 30. Inpex Holdings Inc., Japan's biggest oil explorer, gained 40,000 yen, or 3.4 percent, to 1.21 million yen. Mitsubishi Corp., which generates the second- biggest proportion of its sales from selling crude oil and industrial fuel, rose 110 yen, or 3.6 percent, to 3,190.

Crude oil for February delivery rose 3.4 percent in the last two days to $94.13 a barrel in New York, the highest close since Dec. 12. A measure of six metals traded on the London Metal Exchange, including copper and zinc, added 2.8 percent.

Shipping companies climbed as demand for commodities boosted the outlook for sea transporters. Mitsui O.S.K. Lines Ltd., Japan's second-largest shipping-line, soared 79 yen, or 5.6 percent, to 1,479. Kawasaki Kisen Kaisha Ltd., the third- biggest, advanced 67 yen, or 6.2 percent, to 1,150.

Mitsubishi Chemical Corp. dropped 29 yen, or 3.2 percent, to 871 after the Nikkei said a fire at the company's plant in Ibaraki prefecture may hinder its strategy of diversifying into raw materials for ethylene and other products.

Nikkei futures expiring in March gained 1 percent to 15,600 in Osaka, Japan, and 1.9 percent to 15,590 in Singapore.

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