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Nikkei hits nearly 8-mth high, extends rise after GM

* Shippers, resource shares up on China hopes

* Konica Minolta rises on brokerage upgrade

* News GM to file for bankruptcy removes uncertainty for now

TOKYO, June 1 (Reuters) - Japan's Nikkei average gained 1.6 percent and hit a nearly eight-month high on Monday as shippers including Kawasaki Kisen 9107.T and resource-related shares such as Mitsui Mining and Smelting 5706.T climbed on the prospect of a recovery in demand from China.

News that U.S. automaker General Motors GM.N will file for bankruptcy on Monday removed some short-term uncertainty from the market, helping the Nikkei extend gains. [ID:nCARS1]

Konica Minolta 4902.T jumped 9.8 percent to 1,088 yen after Goldman Sachs raised its rating on the office equipment maker to "Buy" from "Neutral".

But real estate developers were capped after apartment developer Joint Corp 8874.T filed for bankruptcy protection, underscoring the sluggish state of Japan's property market.

“The equity market was lifted by prevailing economic recovery hopes for Japan and elsewhere,” said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.

“It also drew short-term support on prospects of a key phase in the General Motors story coming to an end, although the longer-term implications of GM filing for bankruptcy still remain to be seen.”

Analysts said prospects of increased demand from China provided a significant lift. Data showing China’s manufacturing sector continued to expand for the third month in a row added to tentative signs the world’s third-largest economy is stabilising. [ID:nPEK17043]

Mitsui Mining and Smelting surged 10.3 percent to 247 yen and Dowa Holdings 5714.T climbed 8.5 percent to 460 yen. Sumitomo Metal Mining 5713.T rose 6.8 percent to 1,439 yen.

Trading house Marubeni Corp 8002.T gained 7.2 percent to 462 yen and fellow trader Sojitz 2768.T rose 6.8 percent to 203 yen.

Shippers were also boosted by a rise in the Baltic Exchange's main sea freight index .BADI to an eight-month high on Friday, helped by Chinese demand for goods. [ID:nLT426111]

Kawasaki Kisen surged 7.4 percent to 463 yen, Nippon Yusen 9101.T rose 5 percent to 479 yen and Mitsui O.S.K. Lines 9104.T climbed 6.4 percent to 719 yen.

The benchmark Nikkei .N225 rose 155.25 points to 9,677.75, its highest close since Oct. 7. It earlier hit 9,691.73, its highest since Oct. 8.

The broader Topix .TOPX gained 1.6 percent to 912.52.

Toyota 7203.T climbed 0.3 percent to 3,820 yen and Nissan 7201.T gained 2.3 percent to 584 yen. Honda 7203.T fell as much as 2 percent in early trade but closed up 0.3 percent at 3,820 yen, paring losses after the news that General Motors would file for bankruptcy.

“The news is positive for share prices of Japanese automakers as their market shares in America will widen almost automatically after this,” said Fumiyuki Nakanishi, a manager at SMBC Friend Securities.

Joint Corp filed for bankruptcy protection on Friday with about $1.5 billion in debt, becoming the fourth-largest failure by a listed Japanese firm this year. [ID:nT59081]

Shareholder Orix Corp 8591.T, which provided Joint with capital late last year to shore up its finances, was up 0.5 percent at 6,020 yen after hitting 5,610 yen.

Mitsubishi Estate Co 8802.T rose 0.7 percent to 1,575 yen after dropping to 1,514 yen. Mitsui Fudosan Co 8801.T, Japan's biggest developer, edged up 0.4 percent to 1,591 yen, and Sumitomo Realty 8830.T dipped 0.5 percent to 1,444 yen.

Joint shares were untraded on Monday with their price indicated at 133 yen, down from Friday’s close of 213 yen.

Sumco 3436.T, the world's No.2 silicon wafer maker, slid 5.4 percent to 1,390 yen after it revised down its earnings estimates for the six months to July to a net loss of 50 billion yen ($527 million), bigger than its previous estimate of a 37 billion yen loss.

Trade was active, with 2.5 billion shares changing hands on the Tokyo exchange’s first section compared to last week’s daily average of 2.2 billion.

Advancing shares outnumbered declining ones by 3 to 1. (Additional reporting by Aiko Hayashi; Editing by Joseph Radford)

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