Nikkei scales fresh five-year highs, Sharp Corp jumps

Tue May 7, 2013 9:38pm EDT

* SoftBank rises after strong Alibaba quarterly results
    * Sharp up on report of screen production for next iPhone
    * Toshiba sags on report of undershooting earnings guidance

    By Dominic Lau
    TOKYO, May 8 (Reuters) - Japan's Nikkei average hit fresh
five-year highs on Wednesday after the U.S. S&P 500 set yet
another record high and German industrial orders showed
unexpected strength, with Sharp Corp jumping on a
report of screen production for the next iPhone.
    The Nikkei climbed 0.9 percent to 14,307.07, its
highest since June 2008, extending the previous session's 3.6
percent rally that came after an extended holiday and last 
week's strong U.S. jobs data.
    Investor sentiment was helped by a jump in German industrial
orders, which confounded expectations for a drop, easing
concerns over the euro zone's powerhouse, while U.S. stocks
continued their strong run, with the S&P 500 hitting
another record high.
    "The steady inflows from foreign investors are ongoing. It
wasn't apparent yesterday just because people are still off for
holiday. But today we are seeing more buying demand than 
yesterday. It is providing good support for the market," a
trader at a foreign brokerage said.
    The benchmark Nikkei has surged 65 percent since
mid-November, when Prime Minister Shinzo Abe began promising
expansionary monetary and fiscal policies to revive the economy
during his election campaign.
    The Nikkei, however, was deep in "overbought" territory,
with its 14-day relative strength index at 72.8, above the 70
threshold where it is deemed to be overbought. 
    Stocks got a further shot in the arm on April 4 when the
Bank of Japan stunned markets by launching a massive monetary
expansion campaign aimed at lifting the economy from its long
slumber. 
    Index heavyweight SoftBank Corp climbed 3.6 percent
and was the top-weighted gainer after Chinese e-commerce company
Alibaba Group, in which the Japanese firm holds a stake,
reported a roughly 80 percent year-on-year increase in revenue
to $1.84 billion in the last three months of 2012.
    Sharp was in the spotlight in morning trade, with its stock
surging 6.1 percent after the Nikkan Kogyo Shimbun said the
struggling consumer electronics maker would begin mass
production of liquid crystal displays for the next model of
Apple Inc's iPhone 5 in June. 
    The Nikkei newspaper also said Mizuho Corporate Bank and
Bank of Tokyo-Mitsubishi UFJ had decided to set up an additional
credit line totalling 150 billion yen ($1.5 billion) for Sharp.
    The broader Topix index gained 0.8 percent to
1,197.88.
    But Toshiba Corp sagged 4.1 percent after the
Nikkei said Japan's leading chipmaker and supplier to Apple was
likely to miss its own operating profit forecast by 23 percent
for the business year that ended in March.
    Toshiba, which is to announce its fourth quarter results
after the market close, was the most traded stock on the main
board by turnover, while SoftBank and Sharp took the fourth and
fifth spot respectively.
    Despite some earnings disappointments, investors could take
comfort from improvements in the current quarter. 
    Of the 67 Nikkei companies that have posted quarterly
results so far, 55 percent of them either beat or met market
expectations, according to Thomson Reuters StarMine. That
compared with 62 percent misses in the previous quarter.
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