Nikkei Hits Another High Despite Move to Tighten Margins

Tighter margin requirements helped slow, but could not stifle, the rally on the Tokyo Stock Exchange Wednesday as stubborn investors kept on buying, pushing prices to new highs in brisk trade.

“It’s not as though suddenly the party’s over,” said Toranobu Sugai, senior trader for Shearson Lehman Hutton Asia.

Heavy selling at the open was quickly reversed, with late futures-related buying giving prices a final swift kick up.

The key 225-share Nikkei index jumped 160.12, or 0.43%, to finish at 37,654.29, both a record close and a new traded high. It surged 190.30 on Tuesday and has closed at a record in 10 of the past 11 trading days.

More than 1 billion shares changed hands for the eighth day in a row, with the day’s volume about 1.2 billion shares against 1.3 billion Tuesday.

The Nikkei posted a traded high of 37,589.91 just before the close, after plunging 195.07 in the first 10 minutes.

Steel companies again captured volume, while retailers and pharmaceuticals were chased as domestic laggards.

“People are looking at laggards, and anything under 1,000 yen,” Sugai said. “There’s little downside risk.”

As of Wednesday, securities used as collateral for margin buying will be valued at 50% of market value rather than 60%. The tightening was done because of the recent sharp rally in the stock market, a stock exchange official said.

Separately, share prices finished sharply higher on London’s Stock Exchange Wednesday, boosted in part by a hostile takeover bid.

At the close, the Financial Times 100-share index was up 26.2, or 1.1%, at 2,353.7.