Japan's Stocks Rise, Led by Phone Companies; Komatsu Rises

By Masaki Kondo

Aug. 18 (Bloomberg) -- Japan's stocks rose, led by telecommunications carriers, as some investors bought shares of companies whose earnings can weather an economic slowdown.

Nippon Telegraph & Telephone Corp. and KDDI Corp., Japan's biggest phone operators, advanced. Komatsu Ltd., the world's second-largest maker of earthmoving equipment, climbed as much as 5.1 percent after Nikko Citigroup Ltd. recommended investors buy the stock. Sumitomo Metal Industries Ltd. jumped after Mitsubishi UFJ Securities Co. raised its rating to ``outperform.''

The Nikkei 225 Stock Average climbed 27.82, or 0.2 percent, to 13,047.23 as of 9:39 a.m. in Tokyo, after falling as much as 0.7 percent in early trading. The broader Topix index rose 9.99, or 0.8 percent, to 1,257.30. Three stocks advanced for each that fell on the Topix.

``We'll likely see a stock rally amid a slowing economy as investors shift their money to defensive stocks that generate stable cash flow,'' Ryoji Musha, chief investment officer at Deutsche Securities Inc. in Tokyo, said in an interview with Bloomberg Television.

Nikkei futures expiring in September gained 0.2 percent to 13,060 in Osaka and added 0.4 percent to 13,060 in Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net.