Tuesday February 3, 02:52 AM
Nikkei edges up as techs rise in seesaw trade
By Elaine Lies
TOKYO, Feb 3 (Reuters) - The Nikkei stock average edged up
0.1 percent in seesaw trade on Tuesday, with Hitachi Ltd (Xetra: HIA1.DE - news)
climbing as investors snapped up beaten-down tech shares and
shippers powering higher on hopes for Chinese demand.
But Mitsubishi UFJ Financial Group, Japan's largest
bank, slipped after a newspaper reported the bank will post a
loss for the April-December period and slash its annual
forecasts, hit by stock losses and a rise in bad loans.
Investors were searching for direction after Wall Street
ended mixed and major financial events loomed.
The Dow Jones industrials and S&P 500 fell after uncertainty
over the U.S. administration's plan to stem bank losses hit
financial shares and as a bleak earnings outlook from retailer
Macy's fed fears of a deepening recession, but the Nasdaq (NASDAQ: news) rose on
speculation that technology stocks might be among early
beneficiaries from likely economic stimulus.
'The Nasdaq's gains show that investors have picked up some
confidence, but rises will be limited ahead of things like the
U.S. jobless figures due out on Friday, which are widely expected
to be bad,' said Nagayuki Yamagishi, a strategist at Mitsubishi
UFJ Securities.
Investors, worried about the recent strength of the yen, are
also waiting for a decision on interest rates by the Reserve Bank
of Australia later on Tuesday and one by the European Central
Bank later this week. A strong yen eats into overseas profits
when repatriated.
'This week there's a lot of news for the markets to digest,
such as the interest rate decision and the U.S. jobless figures.
Worry about the Obama bank plan is also capping gains,' said
Takashi Ushio, head of the investment strategy division at
Marusan Securities.
The benchmark Nikkei (news) gained 7.62 points to 7,881.60
after a two-day losing streak that saw it fall roughly 4.5
percent. The broader Topix rose 0.1 percent to 778.72.
CHIPS AND SHIPS
Technology shares, battered sharply lower in recent days by a
succession of profit warnings and grim results, gained as
investors sought to snap up bargains on the Nasdaq advance.
Hitachi, which plunged 17 percent on Monday after warning of
a $7.8 billion annual loss, rose 6.6 percent to 260 yen, while
NEC Corp (Berlin: NEC1.BE - news) -- which also slashed its forecast last week --
climbed 4.8 percent to 242 yen.
Chip-related firms, also sharply sold recently, rose as well,
with TDK Corp (Frankfurt: TDK.F - news) up 6.3 percent at 3,550 yen and Tokyo
Electron gaining 3 percent to 3,460 yen, both off
earlier highs. Kyocera Corp (Munich: KYR.MU - news) rose 2.2 percent to 5,990
yen.
Shippers powered higher, with the shipping sub-index gaining 4.1 percent to become the second biggest
gainer among the subindexes.
The Baltic Dry Exchange, a key freight index, gained
2.7 percent on Monday, and Marusan's Ushio (Berlin: UHO.BE - news) said part of this was
driven by expectations that China may start ordering more iron
ore as its economic stimulus plans get underway.
Chinese Premier Wen Jiabiao said on Monday there was 'light
at the end of the tunnel' but called for strong and effective
stimulus plans.
China has already pledged 4 trillion yuan ($584 billion) over
the next two years to help boost domestic demand, and Wen, on a
visit to England, told the Financial Times that more might be
needed.
'The path to recovery for the world economy is likely to be
through China,' Ushio added.
Kawasaki Kisen climbed 5.4 percent to 352 yen and
Mitsui O.S.K. Lines rose 4.3 percent to 581 yen. Nippon
Yusen, Japan's biggest shipping firm, climbed 4 percent
to 464 yen.
Mitsubishi UFJ sagged 1.9 percent to 476 yen.
Shinsei Bank (Berlin: LCJ.BE - news) lost 5 percent to 115 yen after the
Yomiuri Shimbun daily reported that Shinsei Bank would cut its
forecast for the year to March from a profit to a loss of several
tens of billions of yen, setting the stage for a capital boost
and shift in strategy.
Shinsei is due to report earnings after the close.
Trade was active on the Tokyo exchange's first section, with
902 million shares changing hands, compared with last week's
morning average of 861 million.
Declining stocks outpaced advancing ones, 780 to 772.
($1=6.847 yuan)
(Editing by Brent Kininmont)
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