Nikkei at 10-mth closing high; Nikko Cordial hit

Tokyo, Feb 1: The Nikkei average rose 0.78 percent to close at its highest in nearly 10 months on Thursday as Sony Corp. gained on a brokerage upgrade and NGK Insulators Ltd.

leaped after raising its profit forecast.

Earnings results served as a yardstick for many issues such as Daiichi Sankyo Co. Ltd., which surged 5.1 percent after raising outlook.

But Nikko Cordial Corp. tumbled on continued concern that the issue may be delisted in the wake of an accounting scandal.

Softbank Corp jumped 4.1 percent, indicating strong appetite for stocks among retail investors.

''Earnings results have not been bad,'' said Yasushi Hoshi, strategist at Daiwa Securities Co. Ltd.

The Nikkei rose 136.08 points to 17,519.50, the highest close since April 7 last year. The broader TOPIX index was up 0.97 percent at 1,738.58.

However, Kenji Kobata, a managing director in the research department at Ace Securities Co. Ltd., said technical charts show that the market may be at a turning point to head south.

''The market should have been stronger. The charts are not showing positive stuff,'' he said.

Kobata added that concern about the yen's future direction was keeping investors from turning aggressive.

The Japanese currency inched up against the dollar and euro, trading around 120.50 yen, as market players began to step up their hedging against the risk that the yen's broad weakness may be discussed at the Group of Seven meeting on Feb. 9-10 in Germany.

''Investors are worried that once the yen factor is removed, corporate earnings may not look as good as they do now,'' he said.

Tokyo saw active trade with 2.4 billion shares changing hands on the first section of the Tokyo Stock Exchange. Advancers outnumbered decliners by a ratio of four to one.

SONY SHINES

Sony climbed 2 percent to 5,660 yen after brokerage Nikko Citigroup lifted its rating on the electronics firm to ''buy'' from ''hold'' and boosted its target share price.

NGK Insulators jumped 16.6 percent to 2,130 yen after it raised its full-year operating profit forecast by 24 percent, helped by higher sales of auto products.

The strong earnings led Goldman Sachs to raise its price target by 200 yen to 2,100 yen.

On the other hand, Nikko Cordial plunged 15.5 percent to 1,000 yen after losing more than 14 percent the previous day.

''So far nothing has been decided and no one knows how this is going to turn out,'' said Hideyuki Suzuki, an investment information manager at SBI Securities. ''We are continuing to see more and more questions arising about (Nikko Cordial's) balance sheet.'' A notable loser in the technology sector was Fujitsu Ltd. T>, which dropped 5 percent to 860 yen after posting lower profit.

REUTERS

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