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Nikkei Up Mildly in Morning After U.S. Market Rise

Posted on: Tuesday, 22 November 2005, 18:00 CST

Tokyo, Nov. 22 (Jiji Press)--The key Nikkei average crawled higher on the Tokyo Stock Exchange Tuesday morning, supported by a continued rise of U.S. equities overnight.

The 225-issue Nikkei ended the morning up 19.06 points from the previous day at 14,699.49. On Monday, it rose 57.31 points to set a fresh five-year high.

Meanwhile, the TOPIX index of all first-section issues was off 3.22 points at 1,524.34 after shedding 4.09 points on Monday.

Tokyo stocks got off to a solid start after major U.S. stock indexes extended their winning streaks on Monday. The Nikkei climbed to as high as 14,763.26 with a gain of some 80 points in early trading.

But the Tokyo market's initial strength soon disappeared to send both the Nikkei and the TOPIX into negative territory, as investors took profits on banks and other large-capitalization issues ahead of Japan's national holiday on Wednesday.

Still, the strength of some high-priced technology issues and auto issues helped the Nikkei come back onto the plus side by the morning close.

"Since many technical charts suggest the market's overheating, players opted to lock in profits on large caps," Masayuki Otani, chief market analyst at Maruwa Securities Co., said.

"But the overall market's downside is seen to be limited because investors are showing buying interest in a wider range of small- capital stocks," he said.(MORE)Nikkei Up Mildly in Morning after U.S. Market Rise

Advancing issues led decliners 906 to 635 on the TSE's first section in the morning, while 121 issues were unchanged.

Half-day volume came to 1,074 million shares.

The Nikkei's top-heaviness partly reflected the weakness of Toshiba and other electronics makers, which were sold on the heels of news that Intel Corp. and Micron Technology Inc. will set up a joint venture to manufacture NAND flash memory chips.

"The news was something of a shock since Toshiba is the No. 2 player in the global flash memory market," Otani said.

Demand for NAND flash memories is seen to grow further as they are increasingly used for a variety of products like portable music players, Otani noted. But Toshiba's market share is certain to fall due to the move by the two U.S. technology giants, he said.

The Intel-Micron Technology joint venture, by contrast, could be a boon for Japanese chipmaking equipment makers, Hiroaki Kuramochi, managing director at Bear Stearns (Japan) Ltd., said, pointing to hefty gains scored by Tokyo Electron and other chipmaking gear producers in the morning session.

The weakness of large caps, meanwhile, drove the TOPIX lower in the morning.

"Overseas investors appear to be offloading domestic demand- related issues such as banks" ahead of the Thanksgiving Day holiday in the United States on Thursday, Kuramochi said.(MORE)Nikkei Up Mildly in Morning after U.S. Market Rise

Tokyo Electron, Advantest and TDK rose to new year-to-date highs.

On the other hand, Toshiba slid 6.8 pct and was the most heavily traded issue in volume on the TSE's first section in the morning. Hitachi, NEC and Mitsubishi Electric also lost ground.

Megabank group Mizuho sagged although it on Monday reported a record group net profit for April-September. Selling also hit peers Mitsubishi UFJ and Sumitomo Mitsui.

Insurers such as Millea and Sompo Japan were downbeat as well.

Sega Sammy Holdings came under selling as the company's April- September earnings results, announced Monday, failed to impress investors.

Oil stocks fared well, among them Nippon Oil and Showa Shell Sekiyu.END

Source: Jiji Press English News Service

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