Nikkei rises after China rate cut; Sharp, Toshiba dive to daily limit lows
* 32 of 33 sub-sectors in positive territory * Sharp nosedives after capital reduction report * Toshiba tumbles after cancelling dividend, withdrawing outlook * Pre-tax profit of listed firms seen hitting record high - Nikkei By Ayai Tomisawa TOKYO, May 11 (Reuters) - Japanese stocks jumped on Monday morning after China cut interest rates over the weekend while Wall Street gained on strong U.S. jobs data, helping offset a plunge in shares of Sharp Corp and Toshiba Corp. Sharp tumbled 31 percent to 178 yen, the lowest since December 2012 after the Nikkei business daily said it plans to reduce its capital by 99 percent to 100 million yen as it wipes away years of accumulated losses. The company later said in a statement that it is considering various steps including preferred share issuance and capital reduction but nothing has been decided. Toshiba slumped 17 percent to a one-year low of 403.3 yen after it cancelled a dividend payment and withdrew its earnings outlook as it expanded an investigation into accounting irregularities which began last month. The Nikkei 225 rose 1.3 percent to 19,624.51 at the midday break, recovering from a one-month low hit last week. Over the weekend, the People's Bank of China said it was lowering its benchmark one-year lending and deposit rates by 25 basis points, the third cut in six months, to help support an economy headed for its slowest growth in a quarter of a century. U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low, but it was not strong enough to raise concerns about an earlier-than-expected interest-rate hike by the Federal Reserve. "Although April data alone does not guarantee that there won't be a U.S. rate hike sooner than expected in the coming months, there is a sense of relief for now," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center. He added that the Nikkei will likely recover the 20,000-line gradually helped by earnings forecasts. "Earnings forecasts were conservative as expected, but not too bad to the point where the market is disappointed," Nakai said. The Nikkei business daily reported that pre-tax profits of listed companies are expected to hit a record high in the current fiscal year ending next March. On Monday, exporters were higher, with Nissan Motor Co rising 2.3 percent, Honda Motor Co gaining 1.2 percent and Canon Inc advancing 1.0 percent. The broader Topix added 1.0 percent to 1,603.57, with 32 of its 33 sub-sectors in positive territory. The JPX-Nikkei Index 400 also advanced 1.0 percent to 14,501.76. (Editing by Jacqueline Wong)
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