April 24, 2017 / 2:24 AM / a year ago

Japan's Nikkei hits near 3-week high on French vote relief, Sony climbs

* French vote relief weakens yen to the advantage of Japan stocks

* Sony gains after raising its profit forecast

* North Korea tensions still a worry, defence-related stocks up

By Shinichi Saoshiro

TOKYO, April 24 (Reuters) - Japan’s Nikkei share average rose to a near three-week high on Monday with broader investor risk sentiment improving after centrist Emmanuel Macron took a step towards the French presidency after the weekend’s voting.

The Nikkei was boosted as the safe-haven yen slid to a two-week low versus the dollar on the results of the French presidential election’s first round, which qualified Macron for a May 7 runoff with far-right leader Marine Le Pen.

Latest opinion polls put Macron ahead of Le Pen. Concerns towards the anti-European Union Le Pen winning the elections had been a factor that had weighed on equity markets globally.

The Nikkei was up 1.4 percent at 18,878.31 after rising to 18,910.33, its highest since April 5.

“The equity market is breathing a sigh of relief for the moment. The worst case scenario of Le Pen heading in to the final round of voting with (far-leftist Jean-Luc) Melenchon has been avoided,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

“That said, other geopolitical concerns are likely to limit a further rise by equities, such as tensions over North Korea which marks the 85th anniversary of its army’s foundation this week.”

Pyongyang will mark the anniversary of the foundation of its Korean People’s Army on Tuesday as a U.S. carrier strike group made its way towards the Korean Peninsula.

Defence industry-related firms gained amid lingering geopolitical tensions.

Ishikawa Seisakusho Ltd, a maker of defence equipment including landmines, rose 15.6 percent. Howa Machinery , a manufacturer that supplies rifles and mortars to Japan’s military, gained 5.4 percent. Defence system equipment maker Nippon Avionics Co climbed 8.2 percent.

Shares of Sony Corp rose as much as 4.6 percent to hit their highest since March 31 after the electronics company raised its operating profit estimate for the year ended March 31 thanks to lower amortisation costs for its financial services segment.

Sony now expects a profit of around 285 billion yen ($2.59 billion), up from the 240 billion yen it estimated in February.

Japanese exporters rose after yen slid to near two-week low against the dollar.

Panasonic Corp gained 3.4 percent, Tokyo Electron rose 2 percent and Bridgestone Corp added 1.1 percent. Mazda Motor Corp climbed 1.4 percent and Nissan Motor Co gained 1 percent.

Sanden Holdings Corp dove as much as 10.7 percent after the automotive equipment manufacturer and distributor revised its net loss for the year ended March 31 to 23 bln yen ($209 million) from its prior forecast of 10.8 billion yen.

The broader Topix gained 1.1 percent to 1,504.37 and the JPX-Nikkei Index 400 was also 1.1 percent higher, at 13,467.50. ($1 = 110.0500 yen) (Editing by Sam Holmes)

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