TOKYO, June 1 (Kyodo) — (EDS: ADDING DETAILS AND PRICES, TRIMMING REDUNDANT PARTS)
Japan's key Nikkei stock index rose Monday morning to its highest intraday level in more than seven months as uncertainty retreated ahead of General Motors Corp.'s bankruptcy filing, expected later in the day.
The 225-issue Nikkei Stock Average gained 75.08 points, or 0.79 percent, from Friday to 9,597.58. It touched 9,626.13 at one point, its highest intraday level since Oct. 8, when it logged 10,011.64.
The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 8.50 points, or 0.95 percent, to 906.41.
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Sea transport, trading house and mining issues led the gains. Major decliners included rubber product, auto, and pulp and paper issues.
The U.S. government said Sunday that ailing GM will file for bankruptcy Monday and that the federal government is readying a set of measures to get it back on its feet at an early date. The announcement reached the Tokyo market when it was winding up morning trading.
But the market had apparently largely prepared for the GM bankruptcy.
"Once GM goes bankrupt, stocks will be bought as investors feel the issue is finally settled," Toshikazu Horiuchi, an equities strategist at Cosmo Securities Co., said earlier.
Selling after a three-day winning streak and a weakening dollar, falling to the 94 yen level, dragged the Tokyo market into negative territory at the outset, brokers said.
But the market was lifted by hopes for a global economic recovery, especially in China, which drove up gains in resource and shipping shares, brokers said.
"At the same time, there is growing sentiment in the market that (global) economic prospects are brightening," said Hiroichi Nishi, equity division general manager at Nikko Cordial Securities Inc.
Brokers said hope remains strong that the worst of the recession may be over following a rise on Wall Street Friday after an upward revision of U.S. gross domestic production data.
On the First Section, advancing issues outnumbered declining ones 1,133 to 432, with 125 others ending the morning unchanged.
Mitsubishi UFJ Financial Group, the morning leader in both value and volume terms, rose 16 yen, or nearly 3 percent, to 614 yen.
Sea transport shares climbed after a continued rise in the Baltic Dry Index on maritime trade. Nippon Yusen gained 20 yen, or over 4 percent, to 476 yen, and rival Mitsui OSK Lines also advanced more than 4 percent.
Auto issues lost ground as the U.S. dollar fell to the 94 yen level. Toyota Motor fell 40 yen, or over 1 percent, to 3,770 yen and Honda Motor dropped 40 yen, or over 1 percent, to 2,710 yen.
As for the impact of GM's failure, Horiuchi said, "Concerns over whether the U.S. economy is really all right may surface again over the next couple of months as unemployment rises and more auto parts makers go bankrupt."
Trading volume on the main section came to 1,173.02 million shares, up from Friday morning's 1,146.45 million.
The TSE's Second Section index was up 15.83 points, or 0.78 percent, to 2,033.17 on a volume of 19.11 million shares. On the Osaka Securities Exchange, the near-term June Nikkei 225 index futures contract was up 90 points to 9,600.