* Nikkei up 0.8 pct by midmorning
* Portuguese bond sale eases sovereign debt worries
* Easing European fiscal worry boosts appetite for equities
* Property, financials lead advance for 2nd straight day
By Antoni Slodkowski
TOKYO, Jan 13 (Reuters) - The Nikkei stock average rose to an
eight-month intraday high for a second straight day on Thursday,
after a successful bond auction in Portugal eased fears about the
euro zone's debt crisis and lifted European and U.S. shares.
Financials, which led Wednesday's advance, extended gains as
foreign investors continued adding underweight banking stocks to
their portfolios. Mitsubishi UFJ Financial Group <8306.T>,
Japan's biggest bank by assets, gained 1.3 percent.
The property sector <.IRLTY.> was also among the top gainers,
adding 2.3 percent, as foreign funds continued piling into
undervalued real estate shares supported by the Bank of Japan's
asset buying scheme.
The property sector has gained around 20 percent since the
scheme was launched in October, outperforming the Nikkei's 13
percent rise over the same period.
"The strong bond auction in Portugal has calmed the markets
and with no major negative factors in sight, foreign funds
continue buying lagging banking and property shares," said
Mitsushige Akino, chief fund manager at Ichiyoshi Investment
Management.
By midmorning the benchmark Nikkei <> was up 0.8
percent, or 80.98 points, at 10,593.78. Its immediate resistance
looms at the May 13, 2010 high of 10,638.23. The next target eyed
by investors is the 10,847.90 level recorded at May 6.
The broader Topix <> added 0.8 percent to 936.60.
"Foreigners are buying property, encouraged by the BOJ's
scheme and because they seem cheaper compared to the surging
property shares in China," said Akino, who predicts foreign
buying will continue until at least June, provided that exchange
rates remain steady around current levels.
The Nikkei <>, while sharply underperforming other major
indexes in 2010, has added over 15 percent since the start of
November, with foreign investors net buyers of Tokyo stocks in
the week to Jan. 1 for a ninth straight week.
After less than an hour of trade, trading volume already
stood at 650 million shares, indicating a strong presence of
long-term Euoropean pension funds, said traders.
Wednesday marked the most active trading day this year with
around 2.5 billion shares changing hands the Tokyo Stock
Exchange's first section.
"The Nikkei has had a very strong start to the year, so we
may also see some profit-taking, but the overall trend is for the
index to go up," said Hiroichi Nishi, general manager at Nikko
Cordial Securities.
The healthy bond auction in Portugal drove investors into
riskier assets. Investors were hopeful euro-zone finance
ministers would beef up the European Union's rescue fund.
[]
(Editing by Chris Gallagher)
