Japan Stocks Rise, Led by Insurers; Inpex Gains on China Report

Japanese shares climbed, with a gauge of insurers advancing the most in more than four years after reporting better-than-expected earnings.

Aioi Insurance Co. soared the most in more than four years. Shares also rose on speculation U.S. bond insurer Ambac Financial Group Inc. will retain its credit rating, curtailing writedowns for financial companies. Inpex Holdings Inc. climbed after a report China's state-owned fund plans to buy a stake in it.

``Losses at Japan's insurance companies are smaller than for their overseas counterparts, encouraging investors to pile back in to their shares,'' said Yoshihiro Okumura, who helps oversee the equivalent of $365 million at Tokyo-based Chiba-gin Asset Management Co. The rescue plan for Ambac ``boosts investors' confidence a chain reaction of subprime losses will be averted.''

Sharp Corp., Japan's biggest liquid-crystal display maker, climbed the most in two weeks, pacing electronics makers' gains. Sony Corp. rose to a three-week high. Mitsubishi Heavy Industries Ltd. advanced after saying it's in talks to launch satellites.

The Nikkei 225 Stock Average gained 414.11, or 3.1 percent, to 13,914.57 at the close in Tokyo. The broader Topix index rose 34.17, or 2.6 percent, to 1,355.54. All of the 33 industry groups on the Topix rose.

Aioi surged 14 percent, the biggest advance since October 2003, to 513 yen. Mitsui Sumitomo Insurance Co., the nation's second-largest casualty insurance company, leaped 10 percent, the biggest gain since August 1999, to 1,107 yen.

The Topix Insurance Index jumped 8.1 percent, the biggest advance since October 2003. Other financial companies also climbed, with a benchmark of consumer lenders adding 4.6 percent and a gauge for banks rising 4.1 percent.

Loss Forecast

On Feb. 22, Aioi said subprime-related losses totaled 67.5 billion yen ($629 million) as of Dec. 31, prompting the company to forecast a net loss, compared with an earlier estimate of profit. The Nikkei newspaper had said the Tokyo-based company would report about 90 billion yen in subprime-related losses.

Japan's five biggest casualty insurers reported combined net income of 266.4 billion yen last week for the nine months ended Dec. 31, exceeding their total profit forecast of 240 billion yen for the year to March 31, based on calculations by Bloomberg News.

Ambac, the world's second-largest bond insurer, may receive $3 billion as part of a rescue agreement with banks, according to a person with knowledge of the discussions. A credit downgrade may trigger writedowns among global financial institutions.

China Investment

Inpex, Japan's biggest oil explorer, climbed 7.9 percent after the London-based Times reported China Investment Corp. plans to buy a ``sizable stake'' in the company and is recruiting in Japan to find a local fund manager.

China will allow its commercial banks to invest in Japanese stocks and funds, the China Banking Regulatory Commission said on its Web site on Feb. 22.

Sharp rose 5.2 percent after the Nikkei newspaper said Sony Corp. plans to buy television panels from the company to meet increasing demand and cut costs. Sony added 2.4 percent. Pioneer Corp., Japan's third-largest maker of plasma television, rallied 4.3 percent after the Asahi newspaper said the company is likely to end production of plasma display panels smaller than 42 class.

Mitsubishi Heavy, Asia's largest aerospace company, added 7.5 percent after saying it may win orders to launch commercial satellite using its H-2A rocket. Sumitomo Heavy Industries Ltd. surged 9.5 percent, while Komatsu Ltd. gained 3.7 percent.

Nikkei futures expiring in March advanced 2.9 percent to 13,890 in Osaka and climbed 2.9 percent to 13,875 in Singapore.