Japan stocks rise led by utility shares in wake of recession

Tokyo: Japan's stocks rose in early Monday trading led by drug and utility shares, as the nation's first recession since 2001 raised the attractiveness of companies whose earnings are insulated against a slowdown.

Daiichi Sankyo Co., Japan's third-biggest drugmaker surged 6.9 percent, while Osaka Gas Co., the nation's No. 2 distributor of the fuel, climbed 5.6 percent. GS Yuasa Corp. surged 13 percent after the maker of batteries and lighting equipment reported a first-half profit gain. Mitsubishi Estate, Japan's No. 2 developer, tumbled 3 percent after the Nikkei newspaper said rents for Tokyo offices fell for the first time in six years.

The Nikkei 225 Stock Average rose 251.76, or 3 percent, to 8,714.15 as of 1:08pm in Tokyo, after losing as much as 2.9 percent. The broader Topix index added 18.68, or 2.2 percent, to 865.59. The Nikkei, down 45 percent so far this year, finished its worst month on record in October.

"Shares are so cheap that investors are wanting to get back into stocks,'' said Mitsushige Akino, who oversees about $468 million at Tokyo-based Ichiyoshi Investment Management Co.

Japan's gross domestic product dropped an annualised 0.4 percent in the third quarter, the Cabinet Office said before markets opened, confirming the economy was entering a recession. Economists had estimated a 0.1 percent gain.

The International Monetary Fund said on November 7 the US, Europe and Japan may have their first simultaneous recession in the post-World War II era.