5 Jan 2009

Nikkei index hits two-month high in New Year trading

10:04 pm on 5 January 2009

Japan's stock market has ended its first session of the year up 2.1% and at its highest level for nearly two months, buoyed by New Year hopes.

Honda Motor Co and other exporters climbed on a weaker yen, while resource-linked firms such as trading houses surged as oil jumped more than 3%.

The market had its worst year on record in 2008, with the Nikkei share index losing 42% of its value. Global financial woes and a soaring yen fuelled the losses.

Reuters reports the Nikkei climbed 183.56 points on Monday to finish the half-day of trading at 9043.12, its first time above the 9000 level since 11 November. The broader Topix rose 1.9% to 875.91.

A deepening recession in Japan has knocked confidence in many businesses, especially those which rely on exports. Firms such as Sony, Toyota and Panasonic have seen demand for their goods fall both in Japan and abroad.

The problems have led to many foreign investors withdrawing their money from the Japanese market, one of the reasons for the Nikkei's steep decline in 2008.

The last time in its 58-year history the Tokyo stock exchange suffered a fall of similar magnitude was in 1990, at the beginning of a prolonged economic slump, when the Nikkei fell 39% during the year.

Australian stocks close lower

The Australian stock market closed lower on Monday as profit-taking investors wiped off early gains.

At the close, the benchmark S&P/ASX200 index was down 26.8 points, or 0.72%, at 3687.0, and the broader All Ordinaries index lost 16.8 points, or 0.46%, to 3638.9.

On the Sydney Futures Exchange, the March share price index futures contract was off seven points at 3671 on a volume of 20,883 contracts.