Nikkei up 1.5 pc, Tokyo power cut taken in stride

Tokyo, Aug 14: The Nikkei average rose 1.52 percent on Monday as the market took an early morning power outage in Tokyo in stride and gains in index futures helped Nikkei heavyweights such as Kyocera Corp.

While institutional investors mostly sat on the sidelines at the peak of Japan's summer holiday, retail investors snapped up shares in Bridgestone Corp. and other individual issues.

''Given the lack of trading volume in the cash market due to a summer lull, overall trend is set by trading of Nikkei average futures,'' said Hiroyuki Fukunaga, chief strategist at Rakuten Securities.

The Nikkei finished the morning up 237.26 points at 15,802.28.

It earlier rose as high as 15,837.23, its highest intraday level since May 30.

The broader TOPIX index was up 1.08 percent at 1,594.98.

Growing optimism about the domestic economy after last week's stronger-than-expected machinery orders data helped the benchmark rise above key technical resistance around 15,700, accelerating further short-term buying, market analysts said.

Kenichi Hirano, operating officer at Tachibana Securities, said the Nikkei's 200-day moving average, 15,704 as of Friday's close, has been putting a technical lid on gains.

''Once that's broken through, the market is gaining momentum,'' he said.

ash trade was slow, with 578 million shares changing hands on the Tokyo exchange's first section, well below last week's morning average of 743 million shares.

Advancers beat decliners by a ratio of more than three to one.

Shares in Tokyo Electric Power Co. Ltd., which said about 800,000 homes were affected by the power outage, fell as low as 3,060 yen before reversing the course to trade 0.6 percent higher at 3,130 yen.

he power interruption halted trains and darkened offices at some brokerage firms and financial institutions based in Tokyo, but the Tokyo Stock Exchange began trading as usual.

CAUSE CLARIFIED

Tokyo Electric Power, which serves the Tokyo metropolitan areas with a population of more than 30 million, clarified during early trade that the power cut was caused by an accident, easing initial fears of a security incident.

At a news conference, the company said that the blackouts were caused when a construction crane on a boat hit power lines and that power was back by 9:30 a.m. (0030 GMT) except in some areas of Tokyo's Shibuya ward.

Among Nikkei heavyweights, electronics component maker Kyocera rose 2.5 percent to 9,740 yen and communications and Internet conglomerate Softbank Corp. rose 2.3 percent to 2,435 yen.

Shares in Bridgestone, Japan's biggest tire maker, jumped 5.5 percent to 2,300 yen, extending its 0.9 percent gain from Friday.

Daiwa Institute of Research Ltd said in a report on Friday that it expects a profit rebound in fiscal year 2007/08 despite high raw material costs that have eaten into Bridgestone's profits.

Sapporo Holdings Ltd., Japan's third-biggest brewer, gained 1.31 percent to 618 yen after announcing a friendly takeover of Canadian brewer Sleeman Breweries Ltd. for C9 million.

Shares of sugar refiners were bought after the Nihon Keizai Shimbun reported on Sunday that the Japanese government is considering ways to promote the use of ethanol as an alternative energy source when oil prices are trading near record highs. It also plans to revise laws and promote ethanol-fuelled cars.

Industry leader Mitsui Sugar Co. Ltd. surged 7 percent to 460 yen and Nippon Beet Sugar Manufacturing Co. Ltd. jumped 5.2 percent to 385 yen.

REUTERS