Nikkei snaps 4-day losing streak, boosted by earnings

* Exporter earnings help buoy investor confidence

* Relief after Obama speech pushes market higher

* Fed’s upbeat view on economy positive for market-analysts

* But dismal Nippon Steel forecast limits gains-analyst

By Elaine Lies

TOKYO, Jan 28 (BestGrowthStock) – Japan’s Nikkei average rose 1.6
percent to snap a four-day losing streak on Thursday, with upbeat
reports on profits at Honda Motor (7267.T: ) and Sony Corp (6758.T: )
adding to momentum from strong earnings at other big name stocks
such as Canon (7751.T: ).

But Toyota Motor Corp (7203.T: ) slid on concerns about its
suspension of U.S. sales of key car models, while Nippon Steel
(5401.T: ) fell 3.8 percent after halving its full-year profit
forecast to below the market consensus. [ID:nN27197497]

Short-covering emerged after U.S. President Barack Obama’s
State of the Union address, mainly on relief that he did not lay
out more details for a recent proposal to limit bank risk-taking,
a plan that spooked global financial markets last week.

Market sentiment gained further support from the Federal
Reserve’s more upbeat reading of the economy. Analysts said the
Nikkei was also ripe for a rebound after it shed more than 5
percent in its four-day losing streak to Wednesday.

“There was a lot of caution this week about the Fed and about
Obama’s speech, but the Fed reassured markets yesterday and then
investors were further relieved that Obama didn’t give any more
details on his financial regulation plan,” said Hiroaki Osakabe,
a fund manager at Chibagin Asset Management.

“But the Nikkei’s at a difficult level — we’re still down
below where we ended last year and a lot depends on earnings.
Certainly people are looking at upward earnings momentum but it’s
still mainly expectation.”

A slew of firms announced results after the close, including
Elpida Memory Inc (6665.T: ) and other chip-related companies.
Elpida reported its first net profit in nine quarters on a surge
in DRAM prices. [ID:nTOE60R015]

The benchmark Nikkei (.N225: ) rose 162.21 points to 10,414.29
after earlier rising more than 2 percent to 10,462.70. The
broader Topix (.TOPX: ) rose 0.7 percent to 914.32.

“Investors are welcoming an upward momentum in exporters’
profits on the back of a recovery in exports, a trend which has
finally become more apparent,” said Tsuyoshi Segawa, an equity
strategist at Mizuho Securities.

“But caution will be necessary going forward as investor
focus will likely shift to improvements in earnings in absolute


Investors shunned shares with poor results, while those that
did well — or were expected to do well — forged higher.

Nippon Steel halved its full-year profit on sluggish demand
and prices for construction-use steel and higher raw materials
costs, pushing its stock down 3.8 percent.

One market player said the negative surprise had weighed on
the overall market.

“The Nikkei might have moved up as high as 10,500, but the
Nippon Steel results definitely chilled the mood a bit,” said
Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

Hitachi Construction (6305.T: ) tumbled 7.6 percent to 2,034
yen after the company forecast annual operating profit to fall 51
percent from the previous year, though this was roughly in line
with analysts’ forecasts.

But Canon advanced 1.8 percent to 3,680 yen after the world’s
largest digital camera maker ahead of Sony said it expected its
operating profit to jump 52 percent to 330 billion yen ($3.7
billion) in 2010. [ID:nTOE60Q076]

Honda Motor Co climbed 3.3 percent to 3,140 yen after a
newspaper reported the automaker’s operating profit for the
October-December quarter was roughly twice that of the previous
quarter. [ID:nTOE60Q0B9]

Sony gained 4.9 percent to 3,085 yen after the Nikkei
newspaper said the electronics giant’s operating profit for the
October-December quarter was boosted by a recovery in its video
game and LCD TV operations. [ID:nTOE60Q0B6]

Toyota, though, shed 3.9 percent to 3,560 yen.

About 2.4 billion worth of shares traded on the Tokyo
exchange’s first section (.TV1.T: ), compared with seven-month
highs above 3 billion shares logged earlier this month.

Advancing shares outnumbered declining ones by more than 2 to

Stock Market Trading

(Additional reporting by Aiko Hayashi; Editing by Joseph

Nikkei snaps 4-day losing streak, boosted by earnings