Tuesday October 20, 06:21 AM
Nikkei poised for 3-wk closing high as techs climb
TOKYO, Oct 20 (Reuters) - Japan's Nikkei (news) average is poised to
hit its highest close in three weeks on Tuesday, buoyed by tech
shares such as Kyocera Corp after a wave of solid U.S.
earnings helped underscore that the economic recovery continues.
Shares in companies with a large exposure to the Chinese
market, such as Hitachi Construction, a maker of
earth-moving equipment, gained on expectations of strong economic
growth ahead of GDP data later this week.
Apple Inc (NASDAQ: AAPL - news) beat estimates as its iPhone and Mac sales
hit quarterly records, while Texas Instruments (NYSE: TXN - news) beat
expectations on strong demand from every industry that uses its
chips, from cars to computers and phones.
'There's a sense of relief in the market about corporate
earnings as results by U.S. high-tech companies have been better
than expected so far,' said Takahiko Murai, general manager of
equities at Nozomi Securities.
'Another source of reassurance comes from the view in the
market that China would probably come up with additional stimulus
measures if its economic growth rate were to slow down.'
The benchmark Nikkei rose 0.8 percent to 10,318.29,
on track for its highest finish since Sept. 24.
The broader Topix gained 0.7 percent to 912.47.
On Monday, U.S. stocks rose to fresh 12-month highs, lifted
by investor optimism about corporate earnings.
Although foreign investors, long a key driver of the Nikkei,
are buying, market players said it was still relatively limited
compared with other major share markets and was not providing as
much of a boost as might be hoped.
'Foreign investors remain lukewarm towards Japanese shares in
comparison to other Asian markets, so this will make it hard for
the Nikkei to renew its high for the year,' said Kenichi Hirano
at Tachibana Securities.
'Most of those who are buying Japan appear to be doing it to
get country balance in their portfolios rather than being
motivated by a strong interest in the shares themselves.'
Murai at Nozomi Securities said a weaker yen is one key
factor for further gains in the benchmark Nikkei.
'If the dollar/yen trades at around 92 yen, the Nikkei could
climb back to around 10,500 as many exporting companies have set
their exchange rate assumptions between 92 and 95 yen,' he said.
The dollar was trading around 90.30 yen, down 0.3
percent on the day. Investors welcome a weaker yen as it boosts
exporters' profits when they are repatriated.
EARNINGS BOOST
Apple's profits and sales streaked past Wall Street forecasts
with sales of Mac computers jumping 17 percent, and its shares
shot up in extended trading.
Kyocera (Munich: 860614 - news) gained 1.5 percent to 8,110 yen, memory maker Tokyo
Electron rose 0.9 percent to 5,740 yen and Nikon , a top maker of chip-making steppers, climbed 1.8
percent to 1,779 yen.
China-linked shares rose after a senior Chinese official said
on Monday that China's gross domestic product grew more than 7
percent in the first nine months and that China would have no
difficulty reaching the government's full-year GDP growth target
of 8 percent..
GDP figures for the third quarter are due on Thursday, with
economists polled by Reuters expecting year-on-year growth of 8.9
percent.
Komatsu (Berlin: KOM1.BE - news) , the world's second-biggest maker of
earth-moving equipment, rose 1.7 percent to 1,827 yen and Hitachi
Construction gained 1.8 percent to 2,265 yen.
The Nikkei business daily also said Komatsu likely secured
about 10 billion yen ($110 million) in operating profit for the
July-September quarter on strong demand for construction
machinery in China and other emerging countries.
Trading houses extended gains made on Monday on rises in oil
and metals prices, particularly copper.
Mitsubishi Corp (MBC.IL - news) advanced 2.8 percent to 2,040 yen,
Mitsui & (Munich: 853656 - news) amp; Co gained 2.3 percent to 1,292 yen, and Sojitz added 2.3 percent to 178 yen.
Shares in oil and gas field developer Inpex jumped
3.5 percent to 828,000 yen.
Liquid crystal display glassmakers Asahi Glass Co Ltd and Nippon Electric Glass rose after bigger
rival Corning Inc (NYSE: GLW - news) said a power disruption at its LCD
plant in Taichung would hurt its glass production.
Asahi Glass (Berlin: SHJ.BE - news) rose 1.9 percent to 809 yen and Nippon Electric
Glass was up 1.6 percent at 975 yen on expectations that any
shortage at Corning, the world's largest maker of glass for LCD
screens, would help rivals' sales.
(Reporting by Aiko Hayashi and Elaine Lies; Editing by Michael
Watson)
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