Japan's Nikkei recovers early losses, Nissan jumps

Wed Nov 7, 2012 1:19am EST

* Nissan, Sumitomo Metal Mining up as guidance cut less than
feared
    * DeNA rises after H1 earnings beat own guidance

    By Dominic Lau
    TOKYO, Nov 7 (Reuters) - Japan's Nikkei recouped early
losses on Wednesday, with Nissan Motor Co and Sumitomo Metal
Mining rallying after they cut their earnings forecast less than
feared and as  the market priced in the re-election of U.S.
President Barack Obama.
    Obama rolled to a second term in the White House over
Republican challenger Mitt Romney, who was deemed by many in the
markets as pro-business. 
    The Nikkei ended down 2.26 points, or 0.03 percent,
to 8,972.89 after falling as much as 0.6 percent at the start of
the afternoon session as the expectations of an Obama victory
gathered momentum.
    "It started to price in in the late morning, before the
morning close ... net-net there is no change on flows
otherwise," a dealer at a foreign bank said.
    But gains in the likes of Nissan and Sumitomo Metal Mining
helped the index to claw back losses. The benchmark Nikkei is up
6. 1 p ercent this year, trailing a 13.6 percent rise in the U.S.
S&P 500.
    Nissan climbed 4.1 percent and Sumitomo Metal
Mining surged 6.2 percent, while a 1.9 percent gain in
social gaming company DeNA Co Ltd, after its first half
operating profit beat its own guidance, also lent support to the
market.
    Company quarterly earnings have been weak so far this
reporting season, with 59 percent of the 119 Nikkei companies
that have released their quarterly results undershooting market
expectations, according to Thomson Reuters StarMine. That
compared with 54 percent in the previous quarter.
    "Broadly, they were slightly weaker than I had expected.
After the U.S. elections, there is not much catalyst going
forward in the next couple of months. Under such an environment,
I would not be surprised that the market will see a small
correction," said Hidehiro Tomioka, head of equity investment at
Manulife Asset Management in Tokyo.
    "It is at the high-end of recent trading range ... We may
see some correction to 8,500 in the near-term, a short-term
correction, a healthy one."
    Among the companies that reported disappointed earnings was
engineer Chiyoda Corp, which dropped 4.8 percent after
it announced its first-half results during Wednesday's lunch
break.
    Taiyo Yuden CO Ltd slumped as much as 11.2 percent
to a three-month low after the electronic parts maker slashed
its full-year operating estimate by 50 percent to 5 billion yen.
The stock ended 2.8 percent lower.
    The broader Topix added 0.1 percent to 745.71 in
relatively active trading, with volume 16 percent above its
daily average for the past 90 trading days.
    Global investors would be keen to see the 'fiscal cliff' in
the United States to be resolved after the presidential
election. If not, about $600 billion in government spending cuts
and higher taxes are set to kick in from Jan. 1, which could
push the U.S. and possibly the global economy back into
recession.
    "Now the market's attention is how the new U.S. leader will
deal with its fiscal policy," said Kenji Shiomura, a markets
analyst at Daiwa Securities.