* Hitachi leaps after report to make 5 units wholly owned
* Nomura, Daiwa climb after profit report
By Rika Otsuka
TOKYO, July 27 (Reuters) - The Nikkei share average rose 1.8
percent on Monday, hitting a six-week high on growing hopes for
better-than-expected Japanese corporate earnings and an economic
recovery, with wireless carrier Softbank <9984.T> gaining.
Hitachi Ltd <6501.T> jumped after the Nikkei business daily
said the electronics group plans to spend up to 300 billion yen
($3.2 billion) to turn five listed subsidiaries into wholly owned
units. []
"Hopes for corporate earnings are helping shares extend the
rally, while short-covering in stock futures is also giving them
a lift," said Shinji Igarashi, equity manager of the sales
department at Chuo Securities.
Still, some said investors were starting to become cautious
before a slew of earnings reports this week from blue-chip firms
such as Toyota Motor Corp <7203.T> and Sony Corp <6758.T>.
The benchmark Nikkei <> gained 173.72 points to
10,118.27 after climbing as high as 10,131.64, its highest since
June 12. A rise above 10,170.82 would take the Nikkei to its
highest since October.
The broader Topix <> advanced 1.3 percent to 932.82.
The Nikkei began a brisk rally earlier this month thanks to a
batch of stronger than expected U.S. corporate results. It has
surged nearly 12 percent from this month's low of 9,050.33.
While some have started to worried that the stock market
might be overheating, others said Tokyo shares could extend gains
if many Japanese corporate reports beat forecasts.
Soichi Yamazaki, chief analyst at Fukoku Capital Management
said Nidec Corp's <6594.OS> earnings came in more solid than
expected on Friday, leading investors to believe other electronic
parts makers will also report positive surprises.
"The market is rallying as it is trying to price in the
possibility that the economy could recover sooner than previously
thought," said Yamazaki, adding that there might be more scope
for shares to gain.
Nidec rose 4.1 percent to 6,830 yen after the maker of hard
disk drive motors raised its operating profit forecast to 50
billion yen for the year ending next March, up 11 percent from
its previous estimate, on cost-cutting efforts.
Trade was moderate on the Tokyo exchange's first section,
with 1.1 billion shares changing hands, roughly in line with last
week's morning average. Advancing stocks outnumbered fallers by
about 4 to 1.
HITACHI LEAPS
Nomura Holdings advanced 3.3 percent to 821 yen and Daiwa
Securities Group <8601.T> jumped 3.7 percent to 555 yen after the
Nikkei said the two brokerages likely swung to net profits in the
April-June quarter, each posting 10-20 billion yen. []
Shares of Hitachi <6501.T> surged 5.4 percent to 310 yen.
Hitachi will launch tender offers next month to buy the
shares it doesn't own in Hitachi Maxell Ltd <6810.T>, Hitachi
Plant Technologies Ltd <1970.T>, Hitachi Information Systems Ltd
<9741.T>, Hitachi Software Engineering Co <9694.T> and Hitachi
Systems & Services Ltd <3735.T>, the Nikkei said.
Shares of the five subsidiaries were untraded by midday due
to a glut of buy orders.
Softbank <9984.T> gained 3.8 percent to 1,917 yen, making it
one of the biggest positive contributors to the Nikkei 225.
The Nikkei said the wireless carrier's April-June group
operating profit likely rose 20 percent from a year earlier,
topping 100 billion yen, due to growth in communication fees in
its mobile operations and solid business in other areas.
(Editing by Hugh Lawson)
