Nikkei rises above 16,000 on output data rise

TOKYO, Nov 29 (Reuters) The Nikkei share average rose 0.93 percent on Wednesday to clear 16,000 for the first time in over a week after a surprise rise in industrial output data boosted a wide range of stocks including auto parts maker Denso Corp.

Japan's industrial production rose 1.6 percent in October from a month earlier, government data showed just before the start of trade, handily beating a median market forecast of a 0.5 percent decline.

The surprisingly strong reading encouraged investors to cover short positions on stocks that stand to benefit most from a pickup in industrial output, said Hiroaki Kuramochi, managing director at Bear Stearns.

''But after the Nikkei surpassed the 16,000 level, we are beginning to see some selling,'' he said. ''I doubt it will keep rising today due to investors' worries about the currency and a possible interest rate hike by the Bank of Japan.'' As of 0108 GMT, the Nikkei was up 147.25 points at 16,002.51, recovering from a 0.2 percent fall on Tuesday and above the psychologically key 16,000 level for the first time since Nov.

20. The broader TOPIX index rose 0.92 percent to 1,569.48.

The output data helped brighten the outlook for Japan's economy, lifting a wide range of shares.

Among the top gainers, metalworking machinery maker Amada Co.

gained 4 percent to 1,148 yen, Denso rose 2.09 percent to 4,400 yen and security service firm Secom Co. put on 2.25 percent to 5,900 yen.

Elswhere, SUMCO Corp. fell 1.44 percent to 8,240 yen after the Nihon Keizai newspaper reported the silicon wafer maker planned to issue 60 billion yen worth of new shares, boosting its total shares outstanding by about 6 percent.

Dilution concerns also hit shares of Sawai Pharmaceutical Co.

Ltd., which dropped 4.15 percent to 4,850 yen after Japan's top generic drugs maker announced it would issue new shares worth up to 15 per cent of its total stock outstanding.

REUTERS SBA BST0608