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Nikkei up 151 points in early trade

business Updated: Jul 13, 2007 11:35 IST

Reuters
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Japan's Nikkei average rose 1.40 per cent on Friday, led by Shin-Etsu Chemical Co Ltd, which jumped after a brokerage lifted its target price, while chip makers gained following an earnings announcement by Samsung Electronics Co Ltd. that indicated a brighter second half.

A surge on Wall Street also buoyed a wide range of blue-chip issues including Honda Motor Co Ltd. "It just boils down to a jump in US stocks," said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

But he said the market is unlikely to keep advancing amid a lack of domestic factors for trade, and as the US market rose largely on short-covering following solid earnings results, rather than after solving subprime mortgage problems.

"The Nikkei is likely to hover around the 18,200 level, and then is likely to move little because it's also the weekend," Miura said.

The benchmark Nikkei average finished the morning up 251.01 points at 18,235.15.

The broader TOPIX index climbed 1.17 percent to 1,783.68.

Trade volume jumped with 1.1 billion shares changing hands on the Tokyo exchange's first section, compared with last week's morning average of 835 million.

Advancing shares outnumbered decliners by a ratio of more than two to one.

Shin-etsu chemical, chip makers gain

Shares of Shin-Etsu Chemical climbed 3.7 percent to a record high of 9,480 yen after Credit Suisse raised its target price on the world's largest maker of silicon wafers to 10,700 yen from 9,400 yen while maintaining its "outperform" rating.

During afternoon trade on Thursday, Shin-Etsu posted first quarter net profit growth of 28 percent on brisk sales of wafers used to make microchips, and said it would review its full-year outlook when it announces its first half results.

Shares of chip stocks rose with Tokyo Electron up 3.2 percent at 9,090 yen, while Advantest Corp. added 1.5 percent to 5,380 yen.

Elsewhere, shares of Ibiden Co Ltd jumped 6.5 per cent to 8,400 after Bloomberg News reported the company plans to raise production of diesel particulate filters for cars by as much as 70 per cent by 2010 as tougher environmental rules fuel demand in the US and Europe.

Among losers, shares of Fujitec Co Ltd and JFE Shoji Holdings Inc dropped after the government said Fujitec used steel of sub-standard strength for its 560 elevators. The steel in question was procured from a unit of JFE Shoji, a trading company owned 38.6 per cent by steelmaking giant JFE Steel. Fujitec tumbled 11.3 per cent to 740 yen, and JFE Shoji lost 6.9 per cent to 842 yen.

Shares of Fast Retailing Co Ltd declined 2.2 per cent to 8,040 yen after the clothing retailer on Thursday, cut its full-year forecast for a third time due to losses at subsidiaries and a recent slump in same-store sales. The company also posted a 3 percent decline in quarterly net profit.

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