Tokyo markets mixed; blue chips advance, mid-caps decline

Equities markets in Tokyo were mixed Tuesday, with the Nikkei 225 adding 1.04 percent to 12,656.42 and the Topix gaining 1.45 percent to 1,230.49 but the Mothers market of small and mid-caps dropped 1.36 percent to 612.42. While the Tankan survey showed that manufacturers expect that earnings will rise just 2.3 percent this year and that sales will only go up by 1.9 percent, those results seemed to have little effect on investors. Utilities were up on lower oil prices, while the pharmaceuticals sector gained on broker upgrades after news of some successful new drug trials.

Other Asia-Pacific region equities were mixed but overall results showed that gains slightly outweighed declines as the semiconductors sector advanced on the promise of higher prices for chips on higher demand and declining inventories. Gains were limited, however, by negative reports from European banks due to continuing credit market problems. Australian markets were slightly higher, where the Sydney Ordinaries added 0.09 percent to 5,414.5 while the S&P/ASX200 was up 0.1 percent to 5,361.2. The Hang Seng was 1.26 percent higher to 23,137.46 in Hong Kong and the Straits Times Index gained 1.3 percent to 3,046.54 in Singapore. Decliners included South Korea’s Kospi index, which was down 0.1 percent to 1,702.25. In India, the Sensex was 0.11 lower percent to 15,626.62 while Taiwan’s Taiex fell 1.78 percent to 8,419.72 and the Shanghai Composite dropped 4.13 percent to 3,329.16.

European markets were up on hopes that the worst is over in the subprime mortgage crisis. The pan-European FTSE Eurofirst 300 was up 3.2 percent to 1,302.47. The Dax was 2.84 percent higher to 6,720.33 in Frankfurt while the IBEX added 3.24 percent to 13,699.1 in Madrid and the CAC-40 gained 3.38 percent to 4,866 in Paris. There was only one loser on the CAC-40 and one on the Dax, in the steel sector and among carmakers respectively. Among the biggest winners on the day were banks, insurers, chipmakers, airlines and the aerospace sector.

London’s markets also saw gains, with the FTSE 100 up 2.64 percent to 5,852.6 and the FTSE 250 gaining 3.23 percent to 10,336.2. Banks and mortgage lenders gained on hopes for the end to the subprime crisis. Insurers were also higher, as were property developers and retailers. The pharmaceuticals sector was up on a broker upgrade on good news about a cholesterol drug. Miners, on the other hand saw declines as metals prices dropped.

Wall Street was substantially higher in early afternoon trade. The Dow Jones Industrial Average had added more than 300 points to gain 2.53 percent to 12,573.02 while the Nasdaq Composite was up 2.58 percent to 2,337.96 and S&P 500 was 2.52 percent higher to 1,356.06. Good news included an Insitute for Supply Management survey that came in at 48.6 in March, leaving manufacturing activity still contracting but in better shape than in February. The announcement that UBS (NYSE: UBS; SWX: UBSN; TYO: 8657) and Lehman Brothers (NYSE: LEH) will raise new capital gave the impression that financial groups are taking strong steps to improve their positions. Banks were higher on the session. Water utilities saw gains on general good news, while trucking companies were up on tamer diesel prices even though analysts expect most to miss their quarterly earnings forecasts.

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