Techs lead Nikkei to 13-month peak

TOKYO stocks bounded higher, extending Monday's gains, as investors cheered faint signs that the domestic economy is at last poised for an upturn and the solid overnight strength on Wall Street.

The positive mood put 185.65 points or 1.8% on the Nikkei 225 in the morning session to 10,218.62, before it went on to close at 10.174.10, a rise of 141.13. Tech stocks stood out after US rises.

The Japanese market, supported principally by foreign buying, has now reached its best level for 13 months and put on more than 30% since bottoming in late April. Brokers were enthused by volumes that are the best since the late 1980s.They said China's continued strong growth was an additional boost as it sucked in exports from Japan to support its own rapid expansion.

Deutsche Securities raised its year-end target for the market's principal indicator by 7% to 10,500 points. 'I'm still bearish for the long run,' chief strategist Ryoji Musha said. 'But for some time the market will be strong and trade in a range somewhat higher than 10,000.'

With the tech-heavy Nasdaq up 2%, Japanese investors went on a shopping spree for their own laggard tech shares. They homed in on Toshiba, the country's largest chip maker, which shot up 29 yen or 6.5% to 478 yen. Hitachi surged 38 yen to 589, better by 7%. Tokyo Electron advanced 310 yen or 4.2% to 7750, while chip-testing equipment maker Advantest managed a 360 yen or 5% jump to 7550.

Major lender Sumitomo Mitsui Financial Group rose on a deal to bolster co-operation with South Korean and Chinese counterparts. It firmed 12,000 yen or 3.5% to 355,000. Fuelled by expectations of better sales, carmakers also showed modest rises. Toyota was better by 20 yen or 0.6% at 3290 while Nissan added 22 yen or 1.7% at 1300. Phone giant NTT DoCoMo picked up 12,000 yen or 4.2% to 299,000 after announcing a share buyback programme.

There were similar tech-driven rises in Taiwan and South Korea as follow-through buying came on the heels of US gains.

Seoul heavyweight Samsung Electronics, which enjoys a 20% weighting in the Seoul Composite index, rose 13,500 won or 3.2% to a record 432,500 won, and Hynix Semiconductor powered ahead by 780 won or 9.4% to 9050. The market's benchmark climbed 10.14 points or 1.4% to 740.24.

Taiwan Semiconductor Manufacturing added T$1 or 1.6% at T$62.50, helping to lift the Taiwan Weighted index by 17.29 points to 5534.09, up 0.3%. Australia's All Ordinaries index was shoved to a year-high, buttressed by a strong showing from leading miners. Brokers said resource stocks were benefiting from hopes that demand is continuing to pick up.

BHP Billiton was 22 cents or 2% stronger at A$10.77, WMC Resources rose 17 cents or 4.7% to A$4.82 and Rio Tinto climbed 53 cents or 1.7% to A$32.73. The index closed 11 points higher at 3169.3.

In Hong Kong, leading conglomerate Hutchison Whampoa extended its advance ahead of keenly watched interims on Thursday. It firmed 50 cents to HK$54. The Hang Seng index fell 15.8 points to 10509.3.