Nikkei up 1 pct as steel, machinery shares recover

TOKYO, June 9 (Reuters) - The Nikkei average rose 1.12 percent by midmorning on Friday, snapping a four-day losing streak in which it lost 7.3 percent, as steel makers such as Nippon Steel Corp. gained ground on optimism about the sector's earnings outlook.

A rebound in U.S. blue-chip shares also eased concerns about a possible slowdown in the U.S. economy, a key driver for global growth, prompting buying in Komatsu Ltd. and other global competitors.

''Stocks which had shown resilience until the very last days are the first to rebound, like steel and machinery stocks,'' said Yumi Nishimura, a manager in Daiwa Securities SMBC's investment advisory section.

''The stock market rout yesterday and the day before was something that nobody could do much about,'' she said, adding share prices were hit during such a sell-off no matter how sound companies earnings outlooks were.

The Nikkei was up 163.32 points at 14,796.35 as of 0106 GMT.

The TOPIX index was up 1.41 percent at 1,503.11.

The steel sector ISTEL.rose 4.1 percent, becoming the best performer among 33 industries in the Tokyo exchange's first section. It was the worst performer on Thursday, making it attractive for those looking for bargains.

The sector's earnings growth looks consistent, helped by global consolidation.

Japan's No.3 steel maker Sumitomo Metal Mining Co. Ltd. rose 4.3 percent to 464 yen and top-ranked Nippon Steel was up 3.9 percent at 397 yen.

Nippon Steel, the world's third-biggest steel maker, told Reuters on Thursday it aims to boost its export price by more than 10 percent next quarter in the wake of a strong market recovery in Asia, a sign that its profit this year could beat its forecast.

Komatsu, the world's second-biggest construction machinery maker after Caterpillar Inc. of the United States, jumped 6.2 percent to 2,060 yen, reversing the previous day's 3.8 percent fall.

REUTERS SK VC0725