Nikkei hits 13-mth peak, cyclicals back in favour

  • Reuters
  • Stock Market News
Nikkei hits 13-mth peak, cyclicals back in favour
Credit: © Reuters.

* Nikkei, Topix at 13-mth high

* Despite uncertainties, U.S.-China tariffs rollback hopes help

* Toyota hits 4-yr high as cyclicals gain

* Shiseido, Rakuten, Mercari down on earnings

By Hideyuki Sano

TOKYO, Nov 8 (Reuters) - Japan's benchmark stock index rallied to a 13-month high on Friday on growing optimism for the economy, before paring part of those gains due to conflicting reports on how much progress has been made in U.S.-China trade negotiations.

The Nikkei average .N225 was up 0.26% at 23,391.87, after climbing to as high as 23,591.09 - the highest point since Oct. 10 of last year. For the week, the index logged a 2.37% gain for its fifth consecutive weekly rise.

The broader Topix .TOPX advanced 0.27% to 1,702.77, its highest in more than a year, with trade turnover reaching 3.12 trillion yen ($28.6 billion), 47% above the average over the past three months.

The Chinese commerce ministry said on Thursday that the two countries had agreed to cancel the tariffs in phases, which was confirmed by a U.S. official, who spoke on condition of anonymity. the plan appears to have met opposition from some advisers to U.S. President Donald Trump and there is no clarity on when and where the deal will be signed, investors have so far bet that a deal will come through in the end.

"If you think corporate earnings will recover from here, you can expect further rise in share prices. Investors are now starting to expect such a scenario, which you can tell from the fact that cyclicals such as financials and energy shares are doing well," said Takuya Hozumi, global investment strategist at Mitsubishi UFJ Morgan Stanley (NYSE: MS ).

Carmakers .ITEQP.T and steelmakers .ISTEL.T rose 1.4%, and banks .IBNKS.T gained 0.9%.

Toyota 7203.T rose 2.2% to four-year highs, helped by its release of a share buyback plan and estimates-beating quarterly results. 4543.T rose 13.4% to record highs after the medical equipment maker posted strong earnings in the three months to September.

Isetan Mitsukoshi 3099.T jumped 11.7% after the department store operator posted upbeat quarterly earnings and announced a share buyback.

Kirin Holdings 2503.T gained 9.6% after the beer and beverage maker announce a buy-back totalling up to 6.8% of its shares.

On the other hand, Shiseido 4911.T shed 8.3% after the cosmetics maker cut its outlook on poor sales in South Korea and Hong Kong.

Rakuten 4755.T dropped 4.5% as its quarterly operating profit was almost wiped out in the three months ended September as investment in its e-commerce and mobile units weighed on profits, with the value of its bet on ride-hailing firm Lyft also sliding. 4385.T lost 18.9% after the internet shopping service operator's earnings underwhelmed investors. ($1 = 109.2600 yen)

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