Tokyo stocks rise on upbeat earnings reports

Tokyo stocks extended gains for a second day on Tuesday as solid corporate earnings reports from domestic and U.S. firms lifted investor optimism.

The 225-issue Nikkei Stock Average rose 46.87 points, or 0.42 percent, to close at 11,212.66, having reversed a drop of 0.5 percent as investors sought to lock in profits made on recent gains in early trade, ahead of a slew of corporate earnings reports due in the afternoon.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange was up 0.92 point, or 0.09 percent, to 997.63.

Analysts said that corporate earnings reports that beat market expectations or firms that had upwardly revised their profit forecasts finally spurred investors to buy.

Such optimism reversed a downward trend in the morning session and investors, guided by upbeat corporate earnings reports, stepped up buying in the afternoon session, market players said.

In addition, the market also received support at its 25-day moving average around 11,100, a key technical indicator for investors, and brokers indicated that buying from overseas in stock futures also leant support to the Nikkei Tuesday.

"The earnings recovery is shoring up the market," said Yoshihiro Ito, a senior strategist at Tokyo-based Okasan Asset Management Co.

"Investors are rushing for equities to profit from good corporate earnings."

One Tokyo-based equity manager added that, "Stock futures boosted the Nikkei. Foreign players might be increasing Japanese share holdings as the stock market here is lagging a rally in U.S. stocks that are at 19-month highs."

Strategists also commented that individual issues rising on the back of solid earnings reports outweighed global economic issues such as Greece's debt uncertainty dragging down the euro and China 's government measures to cool the property market potentially dampening consumer spending and curbing demand for raw materials.

Some market players felt that buying was reined in somewhat by some investors concerned about the Federal Reserve's two-day policy meeting and the release of first quarter U.S. growth data as well as reluctance to take form positions ahead of the Golden Week holidays in Japan.

Industrial robotics maker Fanuc Ltd. was one such issue, which surged 11 percent to 11,670 yen, after reporting full-year results that beat analyst estimates and forecast a six-fold jump in operating profit for the first-half of the current financial year thanks to recovery in demand, for the firm's factory controls and robotic products, led by China.

Konica Minolta Holdings Ltd. climbed 7.5 percent to 1,255 yen after the firm raised its operating profit estimate for the business year ended in March to 43.9 billion yen (467 million U.S. dollars) from 34 billion yen (361.25 million U.S. dollars), citing growing demand for copiers and document managing services.

IHI Corp., a manufacturer of heavy machinery, leapt 9.3 percent to 188 yen, as the market continues to cheer its tie-up with Toshiba Corp. and Sharp Corp. added 2 percent to 1,254 yen.

Sharp's corporate results announced after the bell on Tuesday showed the company's profits had risen on increased sales of its LCD displays and solar panels. The firm forecast more than a twofold jump in annual operating profit to its highest in three years, beating market expectations.

Hitachi Ltd. rose more than 2 percent to 414 yen, after revising upward on Monday its group operating profit estimate for the fiscal year ended in March.

Despite the company reporting a more than threefold increase in its group net profit in the January to March quarter from a year earlier after the bell on Monday, Canon Inc., the world's largest maker of digital cameras, fell 10 yen to close at 4,385 yen.

Some 2.20 billion shares changed hands on the Tokyo exchange's First section, up from Monday's volume of 2.08 billion shares.

Declining issues outnumbered advancing ones by 957 to 595.

Source:Xinhua