Nikkei lifted by trading houses and real estate

Japan's 225-issue Nikkei Stock Average spent most of Tuesday morning in negative territory as investors sought out issues that would likely flourish in the New Year, such as those related to emerging markets.

The benchmark Nikkei, buoyed in late trade by commodity-related issues, trading houses, retailers and real estate shares, finally added 3.83 points, or 0.04 percent, from Monday to close at 10,638.06, marking a fresh four-month closing high.


The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 1.09 points, or 0.12 percent, to close at 915.87, a new three-month high.


Japanese trading houses and resource-linked issues gained after oil touched a five-week high of more than 79 U.S. dollars a barrel on Monday, as demand for fuel is expected to rise in the U.S.


Nippon Oil Corp. added 0.46 percent to 439 yen and Osaka Gas Co.Ltd. gained 1.58 percent to 322 yen as domestic demand increases in the winter months.


Nippon Paper Group Inc. advanced 1.47 percent to 2,415 yen, whilst rival Oki Paper Co. Ltd. rose 0.51 percent to 392 yen.


Metal and mining issues also rose Tuesday, with Sumitomo Metal Mining Co. Ltd. edging up 0.29 percent to 1,399 yen and Sumitomo Metal Industries Ltd. gaining 1.19 percent to 254 yen.


Import and export firms added to market gains, with Mitsui and Co. Ltd. advancing 2.07 percent to 1,329 yen and fellow trading house Mitsubishi Corp. adding 1.53 percent to close at 2,315 yen.


"Investors seem to be using the last days of this year to search for theme stocks -- companies connected to emerging markets,which are likely to remain strong next year, as well as resource-linked shares," said Noritsugu Hirakawa, a strategist at Okasan Securities.


Real estate issues faired well in a day of indecisive trading as fresh cues were lacking ahead of the year-end. Positive sentiment regarding Japan's rising industrial production output in November and the perceived gradual emergence from recession continued to resonate through the market, analysts said.


Daiwa House Industry Co. Ltd. rose 0.70 percent to 1,008 yen, whilst Heiwa Real Estate Co. Ltd. gained 0.34 percent to 298 yen. Mitsubishi Estate Co. Ltd. closed up 1.36 percent at 1,486 yen and building developer Sekisui House Ltd. added 0.96 percent to 845 yen.


Banking issues weighed on the market Tuesday as investor consternation about equity financing mounts as banks are faced with meeting the demands of regulators calling for tighter capital standards.


"There are still concerns about banks raising capital," said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co.


Japan's second largest bank Sumitomo Mitsui Financial Group Inc. lost 2.8 percent to 2,655 yen as the institution considers the prospect of share issuance to raise capital.


"We have to stay competitive," Sumitomo Mitsui President Teisuke Kitayama said in a televised interview. "It's not a case of copying somebody, but we need to fully examine the matter to make sure we're not slow off the block."


Larger rival Mitsubishi UFJ Financial Group Inc., which has already raised 1 trillion yen (11 billion U.S. dollars) by way of new common share issuance, dropped 1.09 percent to 454 yen and Mizuho Financial Group Inc. relinquished 1.18 percent to 167 yen.


Struggling carrier Japan Airlines Corp. was a notable decliner on today's market, plummeting 8.3 percent to 88 yen, amid rumors of liquidation and bankruptcy court proceedings, which would effectively render their stock valueless.