Nikkei rises 0.6 pct, hits 7-year intraday high
TOKYO (Reuters) - The Nikkei average hit a 7-year intraday high on Wednesday and closed the morning session up 0.6 percent as Sony Corp. (6758.T) rose on plans to curb chip spending and Bridgestone Corp. (5108.T) jumped after announcing it would beat its earnings forecast.
Advantest Corp. (6857.T) and other semiconductor equipment makers also gained after global sector leader Applied Materials Inc. (AMAT.O) on Tuesday posted a quarterly profit that nearly tripled and said revenue could rise as much as 5 percent in the current quarter.
"Investors are buying high-tech stocks, which have been laggards, and shares of Sony as they expect outsourcing of its 'cell' microchips would lead to efficiency," said Norihiro Fujito, general manager of the investment research and information division at Mitsubishi UFJ Securities.
The Nikkei .N225 finished the morning up 106.29 points at 17,727.74. On Tuesday, the benchmark rose 0.67 percent to 17,621.45, its highest close since May 2000.
The broader TOPIX index added 0.56 percent to 1,765.73.
Trade was active, with 1.2 billion shares changing hands on the Tokyo exchange's first section, above last week's morning average of 1.1 billion shares.
Advancing shares outnumbered decliners by a ratio of more than two to one.
Traders are now awaiting gross domestic product figures due out at 8:50 a.m. on Thursday (2350 GMT Wednesday) for clues on whether the central bank will raise interest rates next week.
Forecasts by 28 economists centered on a 0.9 percent rise in GDP in October-December from the previous quarter in real, price-adjusted terms, or an annualized 3.8 percent.
"If the figures come in higher than market expectations, say 4.5 or 5 percent, the market will take the news as negative on concerns that the Bank of Japan might raise interest rates," Fujito said.
SONY UP, HIGH-TECH STOCKS GAIN
Sony rose 2.7 percent to 6,160 yen after the company said on Tuesday it would cut back on future chip spending and may not produce the advanced chips used in its PlayStation 3 (PS3) in-house in a move aimed at driving the semiconductor unit's nascent earnings recovery. ID:nT9410
Nikko Citigroup said in a report on Wednesday the reduction in its capital spending burden could help Sony boost its margin target.
"We have the impression Sony is reviewing its business positioning from a long-term standpoint, and we anticipate some forward-looking streamlining and refocusing," it said.
Bridgestone gained 4.7 percent to 2,590 yen after Japan's top tire maker said on Tuesday it would likely beat its operating profit forecast for 2006 by 15 percent, citing higher sales volumes, a more profitable product line-up and a weaker yen. ID:nT37261
Chip-equipment firm Advantest was up 2.7 percent at 5,670 yen, and Tokyo Electron Ltd. (8035.T) added 2.2 percent to 8,660 yen.
