January 9, 2019 / 2:38 AM / 10 days ago

Nikkei rises for a 3rd day on trade optimism; chip-related shares underperform

* GS report, Samsung’s weak Q4 profit estimate pulls down chip shares

* China market’s rally support sentiment

By Ayai Tomisawa

TOKYO, Jan 9 (Reuters) - Japan’s Nikkei rose for a third day on Wednesday as signs of progress in Sino-U.S. trade talks boosted confidence, offsetting weakness in chip-related stocks which underperformed on a Goldman Sachs report which forecast a tough year ahead.

The benchmark share average rose 1.1 percent to 20,416.41 points by midmorning, topping its 5-day moving average of 20,054.69.

The United States and China have extended trade talks in Beijing for an unscheduled third day as the world’s two largest economies look to resolve their bitter trade dispute.

So far, officials from both sides have sounded optimistic, with President Donald Trump saying talks were going well. But people familiar with the discussions said the two sides were still far apart on some issues.

“As long as Trump makes efforts to communicate with China, investors take that as a sign of progress,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center.

Such optimism lifted the broader market, with all of the 33 Topix’s subsectors in positive territory. Exporters attracted buyers, with Panasonic Corp surging 3.3 percent, Sony Corp adding 1.1 percent, while Mazda Motor soaring 1.7 percent.

Astellas Pharma surged 4.5 percent after the company said its drug Evenity received world-first approval in Japan for treatment of osteoporosis in patients at high risk of fracture.

On the other hand, chip equipment makers and silicon products manufacturers slid, with Advantest Corp sliding 4 percent, Sumco Corp dropping 2 percent and Screen Holdings shedding 1 percent.

Overnight, the Philadelphia Semiconductor index slid 0.49 percent.

Goldman Sachs forecast a tough year for chipmakers, particularly in the first half, while Samsung Electronics Co Ltd estimated a decline in quarterly operating profit for the first time in two years.

The broader Topix advanced 1.1 percent to 1,535.54. (Editing by Kim Coghill)

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