Monday January 10, 9:58 pm Eastern Time
Nikkei surges by midday, inspired by U.S. gains
TOKYO, Jan 11 (Reuters) - Tokyo shares racked up strong gains by midday on Tuesday as high-tech companies followed in the
footsteps of their Wall Street counterparts on news of a ground-breaking U.S. mega-merger.
The benchmark Nikkei average rose 575.32 points or 3.16 percent to 18,768.73 by the midday break. The March futures contract
<0#JNI:> rose 580 points to 18,750.
Overnight, the Nasdaq composite index (^IXIC - news) posted its biggest ever one-day point gain as news of the huge merger deal
between Internet service provider America Online Inc (NYSE:AOL - news) and Time Warner Inc (NYSE:TWX - news) fuelled a run-up in technology and media shares.
``The opinion both in New York and Tokyo is that high-tech shares have seen enough correction and are ready to head higher,' said Hirokuni Matsumoto, a trader at
Yamatane Securities.
Market players said that while there were few listed companies in Japan similar to either Time Warner or AOL, the news had reignited confidence in the high-tech sector's
growth potential in addition to sparking some buying interest in media firms.
Sony Corp was bid-only and up by its daily limit by the end of morning trade at 25,700, against Friday's close at 23,700.
Sony had posted hefty losses late last week along with other high-tech issues, both on an extended correction on Nasdaq and the company president's comment to Reuters
that its shares were overpriced above 20,000 yen.
Sony had risen overnight on the ADR market along with Hitachi Ltd . Hitachi shares finished morning trade up 146 yen or 9.97 percent at 1,610.
Hitachi said on Tuesday it had agreed to link up with U.S. telecom equipment maker Qualcomm Inc (NasdaqNM:QCOM - news) in commercialising a new system for mobile
data communication.
Among media firms, Fuji Television Network surged by its daily limit of 200,000 yen or 15.5 percent to 1.49 million yen.
Tokyo Broadcasting System rose 470 yen or 14.46 percent to 3,720, after it also briefly surged by its daily limit.
``These two media companies aren't exactly the equivalent of Time Warner, so their gains should only be temporary,' said a strategist at a Japanese brokerage.
But he and other market players said there was genuine investor interest in other electronic commerce-related stocks, after news that convenience store operator
FamilyMart Co Ltd was in talks with Japanese counterparts on an alliance in electronic commerce.
The Nihon Keizai Shimbun financial daily had reported on Tuesday that five Japanese convenience stores, including FamilyMart and Circle K Japan Co Ltd , had agreed to
form a comprehensive alliance in e-commerce.
FamilyMart shares ended the morning session up 380 yen or 6.0 percent at 6,710.
Volume was relatively heavy, with 326.33 million shares traded on the first section compared with Friday morning's 265.58 million.
Gainers outnumbered declining shares 840 to 345, with 135 issues unchanged.
Other indices also saw strong gains. The capital-weighted TOPIX index (^TOPX - news) of all first section shares rose 74.85 points or 4.68 percent to 1,673.86 by midday,
reflecting the rebound in large-cap shares.
The Nikkei 300 rose 12.50 points or 4.07 percent to 319.98, while the second section index rose 102.41 points or 4.15 percent to 2,572.23. The Nikkei over-the-counter
(OTC) index surged 111.12 points or 5.2 percent to 2,246.08 around midday.
Other factors in the market:
-- Yahoo Japan , Japan's leading Internet search service provider, was up by its daily limit of two million yen, around 2.29 percent at 89.4 million. Traders said the rise was
due to strong buying overnight in its U.S. affiliate Yahoo! Inc (NasdaqNM:YHOO - news).
-- Nissan Diesel ended the morning session up 14 yen or 13.08 percent at 121. It was at one point the highest percentage gainer on the first section.
Traders said its shares had been bought on news DaimlerChrysler (NYSE:DCX - news) Co-Chairman Robert Eaton said the firm remains interested in buying Nissan Diesel,
especially if the unit's debt levels were cut in a restructuring.
Eaton had also said in Detroit on Sunday that he saw another auto merger or acquisition in the next three to four months, but did not specify which firms would be involved. |
