Nikkei ends at 10-month high; Casio, realtors up

Tokyo, Feb 2: The Nikkei share average rose 0.16 percent to a 10-month closing high on Friday after hitting its highest in more than six years, as investors snapped up shares of companies that reported upbeat earnings figures such as Casio Computer Co. Ltd. and Dowa Holdings Co. Ltd.

Investors also bought Sumitomo Realty&Development Co. Ltd. and other property shares on expectations that developers can expect a healthy return on their investments thanks to low interest rates and a strong real estate market in Japan.

But chip-related shares such as Advantest Corp. and Tokyo Electron Ltd. slid amid concerns about microchip price falls.

''Investors are picking up shares of companies that posted surprisingly strong earnings, or raised their profit outlook,' said Yasuo Yabe, a director of sales at Meiwa Securities.

The Nikkei was up 27.61 points at 17,547.11, the highest close since last April. Earlier it rose as high as 17,633.61, its priciest since July 2000.

The Nikkei posted its third straight weekly gain, edging up 0.7 percent this week.

The broader TOPIX index was up 0.22 percent at 1,742.40, after hitting its highest since May 2006.

Casio rose 6.7 percent to 2,560 yen. The company on Thursday booked a 13 percent rise in its consolidated net profit for the nine months to December, helped by greater demand for its digital cameras.

Dowa Holdings jumped 11.3 percent to 1,160 yen after the company raised its group net profit forecast for the year to March by 9 percent on Thursday, citing higher profits from its nonferrous metals smelting business. It also raised its annual dividend forecast by 8 yen to 20 yen per share.

Both companies were among the top three contributors to the Nikkei's rise on Friday.

Junichi Misawa, a senior fund manager at STB Asset Management, said the Nikkei is likely to stay around the current level for a while as the market has factored in about 10 percent growth in corporate profits in the current fiscal year to March.

''Although there is a hope that corporate profits will post double-digit growth again in the next fiscal year, it is too early for the market to move to an upper range based on such a scenario,'' he added.

PROPERTY SHARES RISE

Sumitomo Realty, Japan's third-largest property developer,became the largest contributor to the Nikkei's rise, gaining 4.4 percent to 4,510 yen. Tokyu Land Corp. added 5.8 percent to 1,354 yen.

''These companies are benefiting from a growing view the Bank of Japan may not raise rates at its next policy-setting meeting,'' said Soichiro Monji, chief strategist at the equity management department of Daiwa SB Investments.

Misawa at STB Asset Management said investors were turning their focus to domestic demand-related shares, such as property and railway stocks, after booking profits on shares of exporters that led a rally in the Tokyo market since late last year.

Shares of Nikko Cordial bounced 13 percent to 1,130 yen, rising for the first time in six sessions, after the broker restated its earnings for a second time to erase an additional acquisition-related profit deemed inappropriate.

''Submission of half-year financial statements was completed on Feb. 1. With this, we think delisting due to delayed submission of securities reports might have been avoided,'' UBS analyst Azuma Ohno said in a note to clients.

Brewer Sapporo Holdings Ltd. rose 5.0 percent to 759 yen a day after it said U.S. investment fund Steel Partners, its top shareholder, had proposed that the company scrap its ''poison pill'' defence measures against hostile takeovers.

Sapporo said Steel Partners had suggested any defensive measures should be approved by shareholders. Sapporo said it will decide what to do by Feb. 16. The Steel Partners group owns 18.64 percent of Sapporo.

Trade volume remained active, with nearly 2.4 billion shares changing hands on the Tokyo exchange's first section, well above last year's daily average of 1.9 billion shares. Declining shares outnumbered advancers by 900 to 686.

REUTERS