Thursday May 15, 08:47 AM
Tokyo shares close higher on Wall Street's gains, Sony guidance - UPDATE
TOKYO (Thomson Financial) - Japanese shares rose on Thursday to drive the benchmark Nikkei index (news) to its highest closing level in four months as investors sought out bargains after Wall Street advanced overnight.
Sony Corp (Munich: 853687 - news) 's upbeat earnings guidance provided an additional boost to sentiment.
The Nikkei 225 Stock Average closed up 133.19 points or 0.9 percent at 14,251.74, off the day's high
of 14,352.84. It was also the Nikkei's highest closing level since January 10, when it finished trade at 14,388.11.
The broader Topix rose 19.83 points or 1.4 percent to 1,392.87.
Gainers outnumbered decliners 1,305 to 34, with 76 issues unchanged.
Volume rose to 2.45 billion shares from 2.21 billion shares on Wednesday.
'The supply-demand conditions (in the local market) were unusually strong,' Shinko Securities strategist Tsuyoshi Segawa said. 'Considering cases in the past years, the tone of the market should be weak in mid-May amid the earnings reporting season.'
But 'some new funds were seen flowing into the market as investors chased bargain stocks actively, such as Sony, Nippon Telegraph and Telephone and Nikon (Berlin: NKN.BE - news) ,' he said.
'I think stocks are expected to stay on the rebound track, with the Nikkei reaching 15,500 points
before the end of June,' Segawa said.
Trading had opened higher as investors took their cue from Wall Street's overnight gains after a milder-than-expected increase in consumer prices and a drop in crude oil prices.
The Nikkei extended its gains in afternoon trade after the Nikkei newspaper reported that Mizuho Financial Group Corp. is considering conducting a virtual 10-for-1 stock split to eliminate fractional shares.
The key index rose more than 230 points at one stage. But toward the close, stocks trimmed their gains in line with the yen's rebound against the dollar. The dollar was last quoted at 104.88 yen, down from 105 yen earlier in morning trade.
Sony was among the day's biggest gainers, after the company forecast 20 percent growth in operating profit for the year to March 2009, even after posting its second-best operating income in the fiscal year just ended.
The stock rallied 8.7 percent to close at 5,270 yen, off a high of 5,350 yen.
NEC Electronics Corp (Stuttgart: 812960 - news) . surged 13.8 percent to 2,475 yen after the company reported the group's first operating profit in three years. Operating profit reached 5 billion yen, reversing a 28.6 billion yen loss posted a year earlier.
Other high-tech and auto issues were firmer, with major office equipment maker Canon (Berlin: CNN1.BE - news) rising 1.1 percent to 5,590 yen, major automaker Mazda gaining 4.4 percent to 480 yen and semiconductor manufacturer Elpida Memory (Berlin: FNO.BE - news) advancing 3.2 percent to 4,160 yen.
Steelmakers rose following a report that they clinched a deal with Toyota Motor Corp (Frankfurt: 853510 - news) . on a price hike for iron and steel products.
Nippon Steel (Berlin: NPS.BE - news) rose 7 percent to 641 yen, Sumitomo Metal Industries (Frankfurt: 856878 - news) climbed 5.7 percent to 467 yen and JFE Holdings (Frankfurt: 724564 - news) was up 5.3 percent at 5,920 yen.
Shipping companies were firmer on a rise in the Baltic Dry Index (BDI), which tracks the price of shipping various commodities like iron ore and coal.
Kawasaki Kisen Kaisha (Frankfurt: 862868 - news) rallied 5.8 percent to 1,190 yen, Nippon Yusen (Frankfurt: 859849 - news) gained 1.5 percent to 1,081 yen, and Mitsui OSK Lines rose 2.2 percent to 1,581 yen.
Big banks gained ground as worries over the U.S. credit crisis receded. Mizuho Financial Group rose 3.8 percent to 537,000 yen, Mitsubishi UFJ Financial (Berlin: MFZ.BE - news) climbed 2.4 percent to 1,080 yen, and Sumitomo Mitsui Financial Group closed 4.1 percent higher at 864,000 yen.
($1 = 104.88 yen)
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