Nikkei rebounds on Apple's earnings, chip shares advance

08:44, April 22, 2010      

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Japan's Nikkei Stock Average rebounded from a three-day losing streak Wednesday as investor sentiment was lifted by upbeat corporate earnings reports from U.S. firms like Apple Inc. and the yen's depreciation against the U.S. dollar boosted export-related issues.

The 225-issue Nikkei Stock Average gained 189.37 points, or 1. 74 percent, from Tuesday to 11,090.05, marking the first closing level for the index above the psychologically important 11,000 line since Friday.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange advanced 14.96 points, or 1.54 percent, to 987.07.

Investors on Wednesday cheered the release of Apple Inc.'s corporate earnings, which beat market expectations and sent shares in the iPhone maker to a record high.

Subsequently, domestic chip-related issues such as Elpida Memory Inc. and Toshiba Corp. rose on hopes for increased demand and brokers said that recent earnings results are proof that U.S. consumers are buying again.

"The results from the U.S. show Americans are buying, and that' s boosting expectations for demand," said Naoki Fujiwara, chief fund manager in Tokyo at Shinkin Asset Management Co.,

"The weaker yen is also contributing a lot to today's gains."

Other strategists were more circumspect with Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management saying that, "Market participants seem to be mostly engaged in short-term trading, and are probably looking to sell again if something happens," adding that, "It is hard to say how long the correction may last or how deep it may turn out to be."

Akino was referring to the sustainability of Wednesday's rally, in light of a string of 18-month closing highs that kicked off early last month. Analysts, previously concerned about the market overheating, are speculating as to whether the market has seen the end of a pullback -- the Nikkei hit its biggest one-day percentage gain in over a month, marking the largest advance Wednesday among major benchmarks in the Asia-Pacific region.

Toshiba Corp., the supplier of NAND-type flash memory chips for Apple's iPhone and Japan's leading flash-memory maker in general, climbed 2.9 percent to 527 yen and was the second-most-traded stock in Japan by value.

Citigroup lifted its rating on Japan's semiconductor industry to "moderately bullish" from "neutral," saying companies will benefit as a recovery in corporate profits triggers increased demand.

Japan's No. 1 memory chipmaker Elpida Memory Inc. surged 4 percent to 2,091 yen after saying it likely posted a net profit of 2 billion yen (21.5 million U.S. dollars), in stark contrast to analysts' expectations for a loss.

Among other chip-related issues Ibiden Co. Ltd., a supplier to Intel Corp., the world's biggest chipmaker, soared 5.1 percent to 3,595 yen and Advantest Corp., the world's largest maker of memory-chip testers, advanced 3.3 percent to close at 2,432 yen.

Tokyo Electron Co. Ltd., the world's second-biggest maker of semiconductor equipment, rose 3.2 percent to 6,430 yen.

Financials held firm Wednesday with Japan's top-lender Mitsubishi UFJ Financial Group Inc. adding more than 3 percent to 514 yen, and megabank Mizuho Financial Group Inc. gaining over 1 percent to close at 187 yen.

Automakers got a boost from a weaker yen as profits made abroad are not diminished when repatriated and Honda Motor Co. Ltd., Japan's second-largest automaker, rose 1.4 percent to 3,240 yen. Meanwhile Nissan Motor Co. Ltd, which gets roughly 77 percent of its revenue outside Japan, closed in positive territory, advancing 3.2 percent to 808 yen.

All Nippon Airways Co. Ltd. was a notable bright spot on Wednesday's Nikkei, soaring 3.8 percent to 302 yen after Bank of America Merrill Lynch lifted its rating on the stock to "buy" from "underperform".

Further aiding the carrier's rise was European skies being opened for business following more than a five-day lull as air transport bodies waited for clearer skies following a spread of volcanic ash from Iceland.

Some 2.24 billion shares changed hands on the Tokyo exchange's first section, up from Tuesday's volume of around 1.95 billion shares.

Advancing issues outnumbered declining ones by 1,509 to 114.



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