Nikkei ticks up after China PMI data, Panasonic plunges

Thu Nov 1, 2012 3:20am EDT

* Analysts say Sharp and Sony's results priced in
    * Panasonic slumps 20 pct after huge net loss forecast
    * China-related stocks surge
    * TDK and Fujifilm fall after cutting their outlook

    By Ayai Tomisawa
    TOKYO, Nov 1 (Reuters) - Japan's Nikkei average edged up on
Thursday as a pick-up in Chinese manufacturing helped heavy
machinery makers and shippers, offsetting weakness in Panasonic
Corp.
    China-related shares such as construction equipment makers
Komatsu Ltd and Hitachi Construction as well
as shipper Nippon Yusen lent support on hopes that
China's economic recovery is finally gaining some traction.
 
    Komatsu added 3.1 percent while Hitachi Construction gained
4.4 percent and Nippon Yusen surged 4.0 percent. 
    The Nikkei rose 0.2 percent to 8,946.87, and the
broader Topix index added 0.1 percent to 
743.32. Volume was relatively high, with 1.85 billion shares
changing hands, down from Wednesday's nearly two-week high of
2.04 billion. 
    Despite poor earnings released by Sony Corp and
Sharp Corp after the closing bell, analysts said the
market was unlikely to overreact because bad results were
already priced in, analysts said.
    "Investors had expected that Sharp would post massive losses
and Sony's result would not be bright either, and Panasonic had
dragged down the mood for consumer electronics," said Norihiro
Fujito, senior investment strategist at Mitsubishi UFJ
Securities. "The impact on the overall market will be limited
tomorrow."
    Sharp dropped 1.7 percent after two sources said the
struggling TV maker is planning to revise its full-year net loss
forecast to 450 billion yen from its previous outlook for a 250
billion yen loss. 
    Sony shed 4.1 percent to 915 yen, dragged down by Panasonic,
which tumbled 20 percent to 414 yen after it forecast a 765
billion yen ($9.6 billion) net loss for the business year,
nearly matching last year's record net loss. 
    TDK Corp dropped 4.7 percent to 2,856 yen and
Fujifilm Holdings Corp slid 4.4 percent to 1,287 yen
after cutting their full-year outlooks amid sluggish global
growth, but mobile operator Softbank Corp gained 3.6
percent to 2,618 yen after posting better-than-expected
quarterly results.
    "It's quite clear that the earnings have been characterised
by sharp downward revision in exporters or companies that were
expecting a second-half recovery," said Stefan Worrall, director
of equity cash sales at Credit Suisse in Tokyo.
    "The reaction to many of these revisions are actually not
that negative," he said, adding the market had been pricing in
bad numbers for a while.
    Mazda Motor Corp cut its earnings outlook but
surged 11 percent as its revised full-year operating profit
forecast of 25 billion yen was ahead of a market consensus of 23
billion yen.
    As of Wednesday, some 56 percent of the 64 Nikkei companies
that have reported have undershot market expectations, according
to Thomson Reuters StarMine. That compared with 54 percent in
the previous quarter.
    The benchmark Nikkei is up 5.7 percent this year but lags
behind a 12.3 percent rise in the S&P 500 and a 10.5
percent gain in the pan-European STOXX Europe 600 
index.
    According to Japan's Ministry of Finance, foreign investors
turned net sellers of Japanese stocks last week, with a net sale
 of 15.4 billion yen of shares, after a week of net buying.
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