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Industry Information >>Electronics & Electrical>>Nikkei ends up 1.6 pct, Matsushita jumps on earnings

Nikkei ends up 1.6 pct, Matsushita jumps on earnings

Japan - *Nikkei up 1.6 percent, Matsushita jumps on strong earnings

* Sony (nyse: SNE - news - people ) falls after posting unexpectedly weak results

*Financial shares climb as U.S. credit fears ease (Adds stocks andcomments)

By Taiga Uranaka

TOKYO, July 30 (Reuters) - The Nikkei stock average rose 1.6percent on Wednesday, with Matsushita Electric Industrial Co (nyse: MC - news - people ) jumping on strong earnings results and financial shares gainingon easing U.S. credit fears.

But investors dumped Sony Corp after it posted abigger-than-expected fall in quarterly profit and cut its outlook,hurt by sluggish mobile phone sales and price competition.

The market's gains came after a rebound on Wall Street, lifted byhopes for a possible turning point in the credit crisis after Merrill Lynch (nyse: MER - news - people )'s latest plans to write down $5.7 billion and raise $8.5 billionby selling new stock.

"Merrill's measures are a huge step forward, and other financialinstitutions may follow suit," said Katsuhiko Kodama, seniorstrategist at Toyo Securities.

"This means the brokerage can take care of its losses and we arebeginning to see the light at the end of the tunnel," he said.

The benchmark Nikkei ended up 208.34 points at 13,367.79. Thebroader Topix climbed 1.7 percent to 1,302.99.

Trade remained light and a cautious tone continued to prevail inthe market.

"U.S. housing prices have not hit a bottom, and there remainconcerns about additional housing loan-related losses (by U.S.financial institutions)," said Noritsugu Hirakawa, strategist atOkasan Securities.

U.S. home prices plunged 15.8 percent on the year in 20 leadingmetropolitan areas, accelerating their slide from the previousmonth, according to the closely watched Standard & Poor's/CaseShiller report, though the decline was not bad as some feared.

"The Japanese market has been a photograph of Wall Street: When theU.S. goes up, it goes up and when the U.S. goes down, it goesdown," said Fujio Ando, senior managing director of Chibagin AssetManagement.

"The U.S. problems are likely to linger beyond this year, but theJapanese market may eventually break away from that link and startmoving independently given the number of manufacturers competitivein fields like the environment," he said.

Japan's earnings season is in now in full swing and companiesannouncing results after the bell include NTT DoCoMo (nyse: DCM - news - people ) Daiwa Securities Group Inc and Nintendo Co Ltd (other-otc: NTDOY.PK - news - people )

MATSUSHITA UP, SONY DRAGS

Matsushita rose 5.5 percent to 2,300 yen after the company reportedan 86 percent rise in quarterly net profit to a record 73 billionyen, helped by strong sales


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