Nikkei inches up, ending 7-day losing run; Sharp jumps

Wed Nov 14, 2012 1:43am EST

* Nikkei up 0.04 pct in light trade; Topix ends flat
    * Sharp rises after sources say Intel, Qualcomm to invest
    * Aiful jumps after reporting strong H1 results

    By Dominic Lau
    TOKYO, Nov 14 (Reuters) - Japan's Nikkei inched up on
Wednesday to end a seven-straight session losing run, with
struggling TV maker Sharp Corp rallying on news of
possible investment, although looming U.S. fiscal woes and the
euro zone's debt crisis capped gains.
    Debt-stricken Sharp jumped 7.2 percent as investors covered
bearish bets after sources said U.S. Intel Corp and
Qualcomm Inc are in talks to jointly invest about 30
billion yen ($378 million) in the Japanese company.
 It was the sixth-most traded stock on the main
board by turnover.
    But other exporters headed lower on concerns that the U.S.
'fiscal cliff' -- about $600 billion of spending cuts and tax
increases to take effect in the new year -- may push the world's
larget economy into recession and crimp demand for their
products.
    In Europe, sentiment among Germany's analysts and investors
sank in November as the euro zone's debt crisis pounded the
continent's top economy, which looks increasingly at risk of
joining the region's periphery in recession.
    Among the exporters, Toyota Motor Corp, industrial
robot maker Fanuc Corp and construction machinery maker
Komatsu Ltd lost between 0.8 and 1.6 percent.
    The Nikkei ended 3.68 points higher, or 0.04
percent, at 8,664.73 in light trade, with volume at 68 percent
of its daily average for the past 90 days, indicating investors'
wariness amid stuttering global growth and dismal corporate
earnings. 
    "Those who are trading today actively are either individual
investors or day traders who can take risks, and they are
trading on small cap stocks," said Fumiyuki Nakanishi, a
strategist at SMBC Friend Securities. "Since long-term investors
are staying on the sidelines, total volume is low."
    Kyodo news agency reported, minutes before the market close,
that Japan's Prime Minister Yoshihiko Noda told a ruling party
official that he wants to call an election for parliament's
lower house on Dec. 16.
    The benchmark Nikkei had lost 4.3 percent during the
seven-straight session of decline, its longest such losing
streak in seven months.
    But the index is still up 2.5 percent this year, lagging a
9.3 percent gain in the U.S. S&P 500 and a 10.7 percent
rise in the pan-European STOXX Europe 600 index.
    Global investors remain downbeat on Japanese equities, with
a net 39 percent of asset managers saying in November that they
are planning to be underweight on Japan in the next 12 months,
versus 23 percent in October, Bank of America Merrill Lynch's
monthly survey of fund managers showed.
    Weak earnings from Japanese companies also did not help,
with 58 percent of the 147 Nikkei firms that have so far
reported quarterly results undershooting market expectations,
data from Thomson Reuters StarMine showed. That compared with 30
percent of S&P 500 companies missing analysts' forecasts.
    The broad Topix was flat at 722.41 on Thursday.
        
    AIFUL AND BANKS
    Aiful Corp, a consumer financing firm, jumped 30
percent on short-squeeze and was the most traded stock after it
reported a 53.6 percent year-on-year rise in first-half
operating profit. The stock has rallied 189 pe r cent this year.
    Driven partly by its year-to-date gain, investors have been
shorting Aiful. According to data provider Markit, about 70
percent of its stock that is available to be borrowed went out
on loan as of Nov. 12, down from 78.31 percent on Nov. 8.
    Shares in megabanks were mixed ahead of their results later
in the day, with Mitsubishi UFJ Financial Group down
1.4 p e rcent and Mizuho Financial Group off 0.8 percent
but Sumitomo Mitsui Financial Group held steady.
    Societe Generale said in a report that Japanese financials,
including banks, insurers and securities firms, should
outperform in 2013 after turning a strong performance this year.
    "Japanese banks seem less vulnerable to non-performing loan
increases in the near term than either Australian or Chinese
banks," said Guy Stear, head of Asian research at Societe
Generale.
    "While the Japanese economy is clearly slowing ... leverage
across the corporate and private sectors remain relatively low,
which should limit scope for higher NPLs."
    The banking sector is up 4.8 percent this year,
while securities firms have climbed 24.6 percent.