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Tokyo stocks seen rising on techs,more results eyed

Written by: Staff

TOKYO, Oct 26 (Reuters) Tokyo shares are expected to rise on Thursday as tech stocks follow their U.S. counterparts higher, but gains may be limited as investors await more first-half earnings reports from big names such as Sony Corp., Nissan Motor Co. Ltd. and Nippon Steel Corp.

Other companies to announce earnings later in the day include JFE Holdings Inc., Fujitsu Ltd., Canon Inc., Daiwa Securities Group Inc. and Nikko Cordial Corp.

''The market has already risen on hopes for better-than-forecast results. Now it's moving sideways as a series of earnings are due,'' said Yusuke Sakai, a manager of equities trading at Mizuho Securities.

''It looks like the Nikkei average will face difficulty if it nears 16,900,'' he said.

Nikkei futures traded in Chicago pointed to a rise in the index.

Nikkei contracts expiring in December closed at 16,840 in Chicago, an advance of 130 points from their Osaka close.

Tokyo's benchmark Nikkei average is likely to move between 16,700 and 16,900 on Thursday, market participants said.

The benchmark has not touched 17,000 since May. On Wednesday, it fell 0.48 percent to 16,699.30. The benchmark hit a five-month closing high on Monday.

In New York, the Dow Jones industrial average gained 6.80 points, or 0.06 percent, to close at a record 12,134.68 after hitting a new intraday high.

The tech-laden Nasdaq Composite Index advanced 11.75 points, or 0.50 percent, to close at 2,356.59, helped by stronger-than-expected earnings at online retailer Amazon.com.

In a widely expected move, the U.S. Federal Open Market Committee on Wednesday kept its fed funds rate steady at 5.25 percent for the third consecutive month.

Kazuhiro Takahashi, general manager at equity marketing department of Daiwa Securities SMBC, said the Fed's decision as well as its post-meeting statement were within market expectations, which is likely to encourage investors to return to Japanese shares.

Uncertainty over the U.S. interest rate outlook had kept many foreign investors on hold, he added.

Honda Motor Co. Ltd. may be in focus as Japan's third-biggest auto maker on Wednesday posted a weaker-than-expected quarterly net profit on a slowdown in Asian sales but tweaked up its full-year forecasts to adjust for a weaker yen.

Honda's American Depository Receipts (ADRs) fell 0.9 percent to .43, or about 4,096 yen, compared with Wednesday's Tokyo close of 4,070 yen.

Among other companies that announced earnings after the market closed on Wednesday, ADRs of Nomura Holdings Inc. dropped 3.6 percent to .95, or about 2,135 yen, compared with Tokyo's close of 2,165 yen.

STOCKS TO WATCH -- Nomura Holdings.

Japan's biggest brokerage reported a narrower-than-expected 29 percent drop in quarterly profit from a year earlier as gains from merchant banking and asset management helped offset damage from sluggish financial markets.

-- Sharp Corp.

The maker of consumer electronics posted a record profit for the fiscal first half, driven by robust flat TV demand, and it stood by its full-year forecast that came roughly in line with market expectations.

-- NEC Electronics Corp.

The world's eighth-largest chip maker said its quarterly operating loss shrank on improved sales of chips for game consoles, but it revised down its full-year forecast to a bigger-than-expected loss.

-- Seiko Epson Corp.

The company left its annual earnings forecasts unchanged despite a jump in the recent quarter on expectations display prices will fall further while the outlook for paper and ink sales remains unclear.

-- Aiful Corp., consumer lenders.

Japan's ruling party on Wednesday formally scrapped a proposal that would have allowed non-bank moneylenders to charge more than the legal maximum rate on some loans after a change in the law lowers the industry's interest-rate ceiling.

Reuters DKS VP0520

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