Nikkei rebounds, earnings hopes buoy Chugai, others

By Staff
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TOKYO, July 19 (Reuters) Japan's Nikkei average rose 0.15 percent on Thursday as Chugai Pharmaceutical Co. Ltd. gained on solid earnings expectations, while a wide range of recent decliners recovered ground after U.S. stocks fell less than some had expected the previous day.

Shares of Tokyo Electric Power Co. Inc. (TEPCO) fell nearly 6 percent after a newspaper reported on Thursday that the government may order an earthquake-hit nuclear plant to stay shut for more than a year while a safety study is carried out.

TEPCO shares were also under pressure after Nomura Securities cut its rating to ''reduce'' from ''neutral''.

''Investors appear to be done with buying back stocks for now following the sell-off of a wide range of stocks yesterday,'' said Kenichi Hirano, operating officer at Tachibana Securities.

''Today's market lacks domestic factors to further advance, and trade will likely be slow towards next week, the peak of the corporate earnings season.'' Hiroaki Kuramochi, managing director at Bear Stearns, said investors were relieved and bought stocks as Intel's results did not badly affect the New York market overnight.

On Wednesday, the benchmark Nikkei average fell 1.1 percent as technology shares lost ground after disappointing results from chip giant Intel Corp. that raised concerns over high-tech demand.

''But investors are buying on expectations for the upcoming earnings season rather than because they turned overly bullish,'' Kuramochi said, adding that the Nikkei was likely to hover around the 18,100 level throughout the day.

The benchmark Nikkei average finished the morning up 26.92 points at 18,042.50.

The broader TOPIX index inched up 0.08 percent to 1,760.05.

Trade volume was low with 967 million shares changing hands, down from 1.2 billion shares on Wednesday morning. Advancing shares outnumbered decliners 987 to 582.

CHUGAI UP ON EARNINGS HOPES Earnings-related news helped move up Japanese stocks.

Shares of Chugai Pharmaceutical jumped 4.9 percent to 2,125 yen on robust preliminary first-half earnings.

Kawasaki Kisen Kaisha Ltd. climbed 3.5 percent to 1,716 yen after the Nikkei business daily reported the shipper will likely book 28 billion yen (0 million) in recurring profit for the April-June quarter, due to robust shipping demand from China and other countries. That compares with 10 billion yen for the same period a year earlier.

Shares of JFE Holdings Inc. also advanced 3.7 percent to 8,210 yen, hitting life high for a third straight session, helped by growing optimism that its first-quarter earnings to be unveiled on July 30 will be solid.

Recent decliners rose with Canon Inc. up 0.6 percent at 7,050 yen, while Tokyo Electron Ltd. added 0.3 percent to 8,960 yen.

Among stocks that were sold, shares of TEPCO lost 5.8 percent to 3,390 yen.

Shares of bid-target TOC Inc. tumbled 4.8 percent to 1,218 yen. Wednesday was the last day to tender shares and settle transactions to meet the deadline for KK DaVinci Advisors 103 billion yen bid, which ends on Monday.

REUTERS GT VV1113

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