Nikkei up on profit prospects, Honda hits record

Tokyo, Apr 27: The Nikkei average rose 0.55 percent on Thursday on strong earnings prospects at Japan's top companies, while Honda Motor Co. Ltd. jumped more than 10 percent to a lifetime high on an unexpected stock-split plan.

Chip maker Elpida Memory Inc. added to the previous day's 7.3 percent rise on optimism it will swing back to profit this business year, and Daiwa Securities Group Inc. also rose a day after Japan's No. 2 brokerage said its quarterly profit nearly tripled.

Sony Corp., Hitachi Ltd., Fujitsu Ltd. and JFE Holdings Inc.

are among major firms to announce full-year results and outlooks for the year to next March after the market closes. Canon Inc.'s first-quarter earnings results are also due.

''The biggest (positive) surprise was Honda, which announced a share split plan in addition to favourable earnings,'' said Susumu Abe, manager at Mito Securities' information and investment department.

The Nikkei was up 93.36 points at 17,149.29, extending gains into a third session.

It had dropped 489 points on Monday on renewed worries over the impact of a rise in the yen on earnings at Japanese exporters.

The TOPIX index finished the morning session up 0.87 percent at 1,738.35.

Honda, Japan's third-biggest auto maker, hit a lifetime high of 8,570 yen before trading up 8.5 percent at 8,430 yen.

The company late on Wednesday announced an unexpected 2-for-1 share split plan, sparking demand from individual investors.

Honda also posted a 133 percent jump in fourth-quarter net profit on brisk overseas sales, a weaker yen and accounting-related gains.

Elpida climbed 6.1 percent to 5,430 yen, far outperforming a 0.41 percent rise in the electronics machinery sector subindex IELEC.

Analysts said limited gains in the sector as well as the overall market were due partly to caution ahead of Sony's earnings. Shares in Sony were up 0.7 percent at 6,030 yen.

''The main focus is on individual earnings. Given Sony's among a slew of earnings due after the market, the overall market looks a bit slow,'' said Teruhisa Ishikawa, manager at investment information department at Mizuho Investors Securities.

Sony is expected to predict double-digit profit growth this year after blowing past its 2005/06 forecasts thanks to surging sales of LCD TVs, a weak yen and Japan's lofty stock market, which boosted investment gains in its financial division.

Among other gainers, Daiwa Securities gained 4.1 percent to 1,591 yen. Rival Nikko Cordial Corp., another firm to report earnings after the market closes, was up 3.3 percent at 1,876 yen.

Office equipment maker Ricoh Co. Ltd. was up 3.7 percent at 2,250 yen, trimming losses earlier this week after poor quarterly results from U.S. rival Xerox Corp.

Ricoh on Wednesday forecast 2006/07 operating profit at 170 billion yen, which matched market expectations.

In contrast, Shiseido Co. Ltd. sank 6.6 percent to 2,270 yen as its 2006/07 profit forecast announced during the morning session fell short of expectations.

Nippon Oil Corp., Japan's biggest refiner, was also out of favour.

Nippon Oil lost 3.3 percent to 913 yen. The company said late on Wednesday it expects pretax profit to fall 56 percent this business year in reaction to huge gains related to oil stocks it booked last year after a price surge.

Trade was moderate, with 834 million shares changing hands on the Tokyo exchange's first section, little changed from last week's morning average.

Advancers outnumbered decliners, 912 to 635.

REUTERS