Thursday May 15, 04:39 AM
Tokyo shares end morning higher on Wall Street gains, Sony's outlook - UPDATE
TOKYO (Thomson Financial) - Japanese shares finished the morning session higher on Thursday, with investors encouraged by overnight gains on Wall Street and Sony Corp (Munich: 853687 - news) .'s upbeat earnings forecast.
The market opened higher as investors took their cue from Wall Street's overnight gains following a milder-than-expected increase in consumer prices and a drop in crude oil prices. The Nikkei rose nearly 200 points at one stage.
'The market was unexpectedly strong, despite a weak outcome on machinery orders,' Investrust
analyst Hiroyuki Fukunaga said.
Before trading opened, the governent announced that Japan's core private sector machinery orders fell by a seasonally-adjusted 8.3 percent in March from February, suggesting weaker corporate appetite for new investments.
'Investors seemed to feel relieved that the earnings of Sony and Nippon Telegraph and Telephone turned out to be not as bad as they had feared. Also, worries about the (U.S.) credit crunch were receding,' Fukunaga said.
The benchmark Nikkei index (news) 'may touch 14,500 points, depending on the yen rate and the oil price,' he said.
The Nikkei 225 Stock Average ended the morning up 144.86 points or 1 percent at 14,263.41, off a high of 14,313.36.
The broader Topix gained 21.22 points or 1.6 percent to 1,394.26, after rising as high as 1,398.73.
Gainers outnumbered decliners 1,362 to 264, with 92 issues unchanged.
Volume stood at 1.13 billion shares, up from 943 million shares on Wednesday morning.
On Wall Street, the Dow Jones industrial Average closed with a 0.5 percent gain on Wednesday. The Labor Department said that U.S. consumer prices increased 0.2 percent in April after rising 0.3 percent in March, while the core consumer price index rose 0.1 percent, below the market consensus of 0.2 percent.
The benchmark light, sweet crude oil fell $1.58 to settle at $124.22 a barrel on the New York Mercantile Exchange.
In Tokyo on Thursday, stocks rose almost across the board with shares of Sony leading the gains.
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 surged 9.1 percent
to 5,290 yen.
Steel and shipping issues also paced the market, with Nippon Steel (Berlin: NPS.BE - news) jumping 6 percent to 635 yen, Sumitomo Metal Industries (Frankfurt: 856878 - news) rising 6.3 percent to 470 yen, Mitsui OSK Lines climbing 3.1 percent to 1,595 yen and major shipping operator Kawasaki Kisen Kaisha (Frankfurt: 862868 - news) advancing 5.2 percent to 1,183 yen.
NEC Electronics Corp (Stuttgart: 812960 - news) . rallied 12.2 percent to 2,440 yen after the company reported the group's first operating profit in three years, attributing the improvement in its year-to-March performance to heavy cost-cutting and restructuring efforts. Operating profit reached 5 billion yen, reversing a 28.6 billion yen loss posted a year earlier.
($1 = 105.06 yen)
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