July 23, 2019 / 6:52 AM / a month ago

Japan shares track Wall St gains as chip sector rallies

* Chipmakers, electronics parts makers lead gains

* SoftBank Group up on hopes for T-Mobile & Sprint merger approval

* Trading remains subdued ahead of corporate results

By Tomo Uetake

TOKYO, July 23 (Reuters) - Japanese stocks hit their highest in more than a week on Tuesday, with the semiconductor sector tracking Wall Street gains, though trading remained thin ahead of the domestic earnings season.

The benchmark Nikkei share average rose 1.0% to 21,620.88, its highest close since July 12.

On Wall Street overnight, S&P 500 climbed 0.3%, a shade below its July 15 record high close, while the Dow Jones Industrial Average rose 0.1% and the Nasdaq Composite added 0.7%.

Chip stocks gained globally on news U.S. President Donald Trump agreed with top technology heads to make “timely” decisions on whether U.S. companies could sell goods to China’s Huawei Technologies.

Taking their cues from Wall Street peers, Japan’s chip sector drove gains with Tokyo Electron climbing 3.0% and Disco Corp up 1.6 %.

Japanese semiconductor shares are highly correlated with the U.S. Philadelphia chip index, which rose 2.0%.

“Everyone knows the upcoming earnings season will be anything but rosy,” said Toru Ibayashi, head of Japanese equities at UBS Wealth Management in Tokyo.

“But Taiwanese TSMC’s optimistic tone on chip demand, coupled with Goldman Sachs’ rating hike, raised investors’ hopes that commodity chips are bottoming out.”

On Thursday, Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker and supplier to Apple Inc , said demand was likely to recover over the rest of the year.

Apple components makers were also in demand after the Wall Street Journal reported that Apple Inc was in advanced talks to buy chipmaker Intel Corp’s smartphone-modem chip business, citing sources.

Murata Manufacturing Co, TDK Corp and Alps Alpine Co advanced 2.5%, 2.2% and 2.3%, respectively.

Nikkei heavyweight SoftBank Group Corp jumped 4.0% after Fox Business reported U.S. regulators would approve the postponed $26 billion merger between T-Mobile US Inc and Sprint Corp.

Elsewhere, Akebono Brake Industry Co extended its stellar gains for the fourth consecutive trading day, surging 4.9%, on continued hopes for restructuring of the troubled car parts maker’s money-losing business.

The broader Topix added 0.8% to 1.568.82. Turnover on the Tokyo Stock Exchange’s main board was subdued at 1.66 trillion yen ($15.4 billion) versus the daily average of 2.34 trillion yen over the past year.

Japan’s June quarter corporate earnings season kicks off with Canon Inc, Nidec Corp and Shin-Etsu Chemical Co announcing results after the market close on Wednesday.

$1 = 108.1100 yen Reporting by Tomo Uetake; Editing by Simon Cameron-Moore and Sam Holmes

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