Nikkei up on earnings hopes, Sony gains

TOKYO, Apr 21 (Reuters) The Nikkei average rose 0.72 percent on Friday as hopes for strong earnings lifted Sony Corp. and other blue-chip shares, while Kyocera Corp. and cellphone-related shares rang up gains on growing demand.

Auto stocks such as Honda Motor Co. Ltd. got a boost from a bullish JP Morgan report.

Tsuyoshi Nomaguchi, a Japanese equity research strategist at Daiwa Securities Co. Ltd., said investors are getting ahead of themselves before earnings from blue-chip companies are out next week.

''The thinking goes that since U.S. technology firms have produced strong earnings, so will Japanese technology firms,'' he said.

The Nikkei average was up 125.50 points at 17,443.03 as of 0459 GMT. The broader TOPIX index was up 0.82 percent at 1,762.21.

Michael Coates, director of equity sales at KBC Financial Products, said investors seems to be switching out of small-cap stocks to large-cap stocks with liquidity.

''So if anything goes wrong, if there is a Livedoor-type event or if there is any event on the horizon which comes out, they're not going to be stuck with stocks they can't get out of,'' he said, referring to Livedoor Co. Ltd., whose former chief, Takafumi Horie, was arrested earlier this year on suspicion of violating securities laws. ''People are being quite risk-averse at the moment,'' Coates added.

Sony rose 3.2 percent to 6,130 yen, extending gains into fourth day as the company's plan to more than double its LCD TV shipments this business year raised expectations for healthy profit prospects.

Kyocera and mobile phone-related rose after mobile-phone giant Nokia reported better-than-expected quarterly sales and earnings.

Kyocera added 3.8 percent to 11,550 yen and electronics components maker Murata Manufacturing Co. Ltd. gained 4.3 percent to 8,470 yen.

Auto stocks ramped up after JP Morgan began coverage of the Japanese auto industry on Thursday with a ''bullish sector stance''.

Toyota Motor Corp. rose 2.7 percent to 6,900 yen and Honda Motor surged 4.3 percent to 8,090 yen.

Shares of Sawai Pharmaceutical Co. Ltd. were up 1.2 percent at 4,350 yen, turn positive after starting the afternoon session flat as the generic drug maker's managing director told Reuters on Friday that its annual sales target of 30 billion yen could be achieved ahead of plan for 2007/08.

Notable losers are resource-related stocks as U.S. crude oil for May delivery fell 22 cents to settle at .95 a barrel in New York on Thursday, off a recent record high of .49. Base and precious metals prices also retreated from their highs.

Sumitomo Metal Mining Co. Ltd., Japan's biggest gold producer, dropped 2.8 percent to 1,704 yen. Oil developer INPEX Holdings Inc.

lost 0.8 percent to 1.22 million yen.

REUTERS CS BD1100