Nikkei rises after China rate cut; Sharp, Toshiba dive to daily limit lows

domingo 10 de mayo de 2015 22:38 GYT

* 32 of 33 sub-sectors in positive territory
    * Sharp nosedives after capital reduction report
    * Toshiba tumbles after cancelling dividend, withdrawing
    * Pre-tax profit of listed firms seen hitting record high -

    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
    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)