Nikkei breaks 16,000 for first time in five years

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The Independent Online

The Japanese Nikkei share average broke though 16,000 points for the first time in more than five years yesterday, ending the day 1 per cent higher.

Retailers, whose shares nudged up after figures showed a third successive rise in department store sales in November drove the market rally.

The sector was also boosted by news of a major deal as Asia's biggest retailer, Seven & I Holdings, said it was buying its privately owned rival Millennium Retailing for some $1.7bn (£981m). The deal, which creates the world's fifth-largest retailer, will help strengthen Seven & I's position against Wal-Mart, the US retailing giant that has recently increased its presence in Japan.

Some UK corporate news also emerged from the Japanese market yesterday as Fuji Photo Film said it would buy Avecia, the British ink-dyes supplier, for £150m in February, to bolster its copier and printer division.

Avecia, a private, Lancashire-based company, has a share of some 40 per cent in the ink-dye market.

Japan was the only major global stock market to open yesterday, with New York and all European bourses closed. However, the Russian market was open and its RTS index closed up marginally. Sistema, the Moscow and London-listed conglomerate, announced it was selling a 10.95 per cent stake in Comstar UTS, its fixed-line telephone operator, to Deutsche Bank for $132m. The deal leaves Sistema with a minority 43.64 per cent stake. It plans to float the business in London in the first half of 2006.

Indian markets were also open. Shares fell sharply for the second consecutive session, as investors consolidated positions beforethe expiration of year-end derivatives contracts. The BSE index closed down 1.85 per cent, its biggest daily drop in almost 14 weeks. But it still looks set to finish the year 30 per cent higher than it began.