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Ninth day of gains as recovery hopes rise

THE Nikkei share average rose 1.5 percent yesterday, gaining for a ninth straight day, on growing hopes for better-than-expected Japanese corporate earnings and an economic recovery.

Shares of Hitachi advanced 3.4 percent to 304 yen (US$3.19).

Hitachi Ltd climbed after the Nikkei business daily said the electronics group planned to spend up to 300 billion yen to turn five listed subsidiaries into wholly owned units.

Hitachi will launch tender offers as early as next month to buy the shares it does not already own in Hitachi Maxell, Hitachi Plant Technologies Ltd, Hitachi Information Systems Ltd, Hitachi Software Engineering Co and Hitachi Systems & Services Ltd, sources said.

Shares of the five subsidiaries all rose by nearly 20 percent.

The benchmark Nikkei began a brisk rally earlier this month thanks to a batch of stronger-than-expected United States corporate results such as from Intel Corp.

The Nikkei has surged nearly 12 percent from this month's low of 9,050.33, bringing it more than 40 percent above its March lows.

The upbeat momentum helped the Nikkei to book its longest run of gains since 1988 yesterday.

"Upbeat US earnings, particularly from the high-tech sector, rekindled optimism about earnings from domestic companies that are sensitive to the health of the economy," said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

But shares of Japan's top three shippers, including top-ranked Nippon Yusen KK, fell after they slashed profit forecasts due to a delay in the recovery of automobile and container shipping and higher fuel costs.

The benchmark Nikkei gained 144.11 points to 10,088.66, its highest close since June 12.

It had briefly touched 10,179.59 yesterday, its highest level in nine months.


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