Nikkei rises as Intel results spark short-covering

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Johnson & Johnson
JNJ.N
$62.69
+2.23+3.69%
04/19/2011

Intel Corp
INTC.O
$19.86
+0.24+1.22%
04/19/2011

Advantest Corp
6857.T
¥1,445
+40.00+2.85%
8:38am GMT+0700
By Ayai Tomisawa
TOKYO | Tue Apr 19, 2011 9:44pm EDT
(Reuters) - Japan's Nikkei rose on Wednesday, after Intel's earning guidance sparked short-covering in chip-related stocks while commodity shares climbed on strength in gold and oil prices.

Market sentiment was also bolstered by Johnson & Johnson (JNJ.N) which raised its profit outlook and was one of the first major names to rally following results this season.

"The market is rebounding, but it's nothing more than short-covering. Investors will not go long until they see Japanese corporate earnings later this month," said Kenichi Hirano, a strategist at Tachibana Securities.

He added that the Nikkei will likely continue to see resistance of 9,700 in the next few weeks.

The Nikkei rose 1.4 percent or 129.61 points to 9,570.64, while the broader Topix .TOPX added 1.0 percent to 835.53.

Hit by a weak outlook from Texas Instruments on Tuesday, Japanese chip-related shares bounced back after Intel Corp (INTC.O) forecast quarterly revenues well above Wall Street's estimates, defying fears the world's top chip maker is struggling to find its footing as personal computer sales growth wanes.

Advantest (6857.T) gained 2.5 percent to 1,440 yen, Ibiden (4062.T) surged 7.0 percent to 2,585 yen and Tokyo Electron (8035.T) added 3.8 percent to 4,465 yen.

Moreover, Intel's chief financial officer said that Japan's disaster is not affecting production and world PC supply chain was able to meet demand.

"Intel's results were encouraging as some investors were concerned that the March 11 quake has put pressure on Texas Instruments' earnings," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Commodity shares were higher, with gold futures hitting an all-time high above $1,500 an ounce and U.S. oil prices rising on a weaker dollar.

Sumitomo Metal Mining (5713.T) gained 1.6 percent to 1,405 yen, Inpex (1605.T) added 2.6 percent to 598,000 yen and trading house Mitsubishi Corp (8058.T) rose 1.3 percent to 2,188 yen.

But bank shares underperformed after sources said the three major Japanese banking groups will likely book a combined loss of 160 billion yen ($1.9 billion) on their holdings of Tokyo Electric Power Co (9501.T) shares.

Mitsubishi UFJ Financial Group (8306.T) rose 0.3 percent to 378 yen, Mizuho Financial Group (8411.T) added 0.8 percent to 126 yen and Sumitomo Mitsui Financial Group (8316.T) was flat at 2,441 yen.

($1 = 82.580 Japanese Yen)

(Additional reporting by Antoni Slodkowski; Editing by Edwina Gibbs)