Japan Stocks Rise After Historic Sell-Off; Tepco, DoCoMo Climb

By Masaki Kondo
Enlarge Image/Details

Oct. 17 (Bloomberg) -- Japanese stocks rebounded from their worst plunge in two decades as the deepening financial crisis prompted investors to buy companies whose earnings are insulated from a slowdown in overseas markets.

Tokyo Electric Power Co., Asia's biggest utility, gained 8.8 percent, while NTT DoCoMo Inc., Japan's most profitable mobile carrier, rose 7.4 percent after Nikko Citigroup Ltd. recommended its shares as a ``defensive play.'' Mitsui & Co., a trading company that gets more than half its profit from commodities, lost 3.5 percent on speculation oil prices will continue to fall.

``With the financial crisis spilling over into the wider economy, we're in a state of emergency,'' said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees about $61 billion in Tokyo. ``In such a situation, shares in companies with relatively stable earnings provide a safe harbor for investors.''


The Nikkei 225 Stock Average climbed 235.37, or 2.8 percent, to close at 8,693.82 in Tokyo, while the broader Topix index rose 29.77, or 3.4 percent, to 894.29. The Nikkei posted a 5 percent gain this holiday-shortened week, the first advance since the five days ended Sept. 12, and following its worst week ever. The Topix added 6.4 percent this week.

Yesterday, the Nikkei sank 11.4 percent, the biggest slump since October 1987 and its second-sharpest drop ever, after a record 14 percent gain two days earlier.

Nikkei futures expiring in December added 5 percent to 8,660 in Osaka and gained 4.5 percent to 8,660 in Singapore.

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