Nikkei rises for third day despite glitch; Sharp plunges

A man looks at an electronic board displaying a fall in major market indices around the world outside a brokerage in Tokyo December 9, 2011.

TOKYO (Reuters) - The Nikkei stock average gained for a third day on Thursday, supported by economic data out of the United States and China, in a session that was marred by technical problems that prevented morning trade of some 240 shares and instruments.

Banks and securities firms outperformed on better-than-expected earnings but some of the sharpest moves came from electronic companies bleeding red ink, with Sharp Corp (6753.T) sliding by its daily limit or nearly 16 percent to a 31-year low after forecasting a record annual net loss.

"Its earnings yesterday just affirmed the view that there are major challenges facing Japan's consumer electronics industry, which includes Panasonic and of course Sony," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities.

After the bell, Sony Corp (6758.T), warned it was heading for a worse-than-expected $2.9 billion annual loss, revealing the daunting task ahead for its incoming chief executive, Kazuo Hirai.

Sony, one of the shares affected by the glitch in morning trade, ended 2.6 percent lower. Its shares trading in Frankfurt (6758.F) sank 4.6 percent.

While signs are clear that the pain for many Japanese companies will continue, brokers are remarkably no more pessimistic on Japan than some other mature markets such as Hong Kong, Singapore, and some are simply amazed that many Japanese firms are managing to eke out profits at all.

Overall, brokers have a neutral stance on the benchmark Nikkei .N225, roughly in line with Singapore, Hong Kong and Australian stock markets according to Thomson Reuters StarMine data.

Highlighting that sentiment, the Nikkei advanced 0.8 percent to 8,876.82 on Thursday, continuing to extend gains after rallying 4 percent in January. The broader Topix index .TOPX gained 0.6 percent to 762.45.

The systems glitch hit 153 Topix shares, some exchange traded funds (ETFs), real estate investment trusts (REITs) and convertible bonds. It was the worst technical glitch to hit Tokyo cash shares since November 1, 2005, when trading in 2,520 instruments were suspended due to system problems.

"This is absolutely ridiculous. Absolutely ridiculous. On a day like today, it's earnings season for god's sake," a trader said.

But trading volume did not appear to suffer too much. Volume hit its highest level since January 20, with 2.25 billion shares changing hands on the main board.

FINANCIALS UP

Nomura Holdings (8604.T) outperformed the market, soaring 7.1 percent after it booked a surprise net profit of 17.8 billion yen ($234 million) for October-December due to a jump in revenue from its investment banking businesses in Europe.

Banks also outperformed, with Mitsubishi UFJ Financial Group (8306.T) jumping 2.5 percent after its nine-month net profit rose 48 percent, boosted by a one-off gain booked earlier last year from its stake in Morgan Stanley (MS.N).

Sumitomo Mitsui Financial Group (8316.T) rose 2.1 percent, while Mizuho Financial Group (8411.T) gained 2.6 percent.

According to StarMine data, of the Nikkei companies that have reported quarterly figures so far, 61 percent have fallen short of below market expectations, compared with 34 percent of S&P 500 .SPX companies.

But market participants say much of the negative impact from the floods in Thailand and disasters in Japan had now been factored into share prices, adding that the benchmark could continue to gain as Japanese stocks are still undervalued by some gauges such as price-to-book ratio.

(Additional reporting by Hideyuki Sano and Dominic Lau; Editing by Edwina Gibbs)