Nikkei hits one-month high on Wall St rally; financials shine
* Nikkei rises 0.7 pct, Topix up 0.9 pct * Wall Street rise, solid U.S. housing data support sentiment * Trade light as foreigners' orders limited due to long US and UK weekend By Tomo Uetake TOKYO, May 26 (Reuters) - Japanese shares climbed to a one-month high on Monday morning, extending its winning streak to a third day, helped by the yen's retreat and a closing record-high for Wall Street on upbeat U.S. housing data. The benchmark Nikkei gained 0.7 percent to 14,559.43 in early trade, after rising as high as 14,592.60, a level last seen on April 22. The index has extended a rebound from a one-month low of 13,964 hit just on Wednesday. Activity was light, partly as financial markets in London and New York are closed on Monday for public holidays, and the rally was blocked at a major resistance -- an Ichimoku cloud top at 14,600. "The order flow this morning is severely crimped by holidays in the U.S. and U.K.," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo. "While you have this extraordinary rally in the U.S., the key levels to look at here are 100 yen for the dollar/yen and 14,000 for the Nikkei. Since we've bounced off in very light volume, it's too early to say we are out of the woods yet." The yen retreated to 101.960 yen to the dollar, from the 3-1/2 month high of 100.805 yen hit last Wednesday, providing some relief to investors worried that a strong yen will erode exporters' profits. The U.S. S&P 500 closed at a record high on Friday, buoyed by a rally in housing stocks after better-than-expected new home sales data. Sales of new U.S. single-family homes rose more than expected in April and the number of houses on the market hit a 3-1/2 year-high, data showed on Friday. The market mood was also helped by a decisive victory for Ukrainian billionaire Petro Poroshenko in the nation's presidential election, which raised hopes of a resolution to a months-long crisis. Financial shares led the way as investors bought them back following their sharp fall so far this year. Security brokerages rose 2.4 percent, though they are still the worst performer this year with fall of 21 percent. They were followed by other battered shares, such as banks and steelmakers, which rose 1.5 percent and 1.8 percent respectively. Nomura Holdings rose 2 percent, hitting seven-week highs, Mitsubishi UFJ Financial Group gained 2.1 percent and Mizuho Financial advanced 1.5 percent. Nippon Steel and Sumitomo Metal climbed 1.8 percent. Panasonic Corp, Sony Corp and Japan Display Inc rose after domestic media reported that the three companies will tie up to form an organic light-emitting display business. Panasonic rose 1.1 percent, Sony 4.2 percent and Japan Display 2.3 percent. The broader Topix advanced 0.9 percent to 1,190.50 in subdued trade, with trading volume at 28.1 percent of full daily average for the past 90 days. The new JPX-Nikkei Index 400 added 0.8 percent to 10,858.68. (Editing by Shri Navaratnam)
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