Tech sector leads Nikkei rally after Brexit relief

TOKYO, Oct 18 (Reuters) - Japanese shares inched higher on
Friday after high-tech companies jumped on upbeat earnings from
Taiwan's TSMC while the overall sentiment was also underpinned
after the European Union and Britain struck a severance deal.
The Nikkei share average .N225 rose 0.77% to 22,624.60,
jumping above Tuesday's high to hit a 10 1/2-month high while
the broader Topix .TOPX gained 0.39% to 1,630.52.
The Nikkei extended gains after China's industrial output
beat market expectations, somewhat easing worries about
manufacturing slowdown in China in the wake of Sino-U.S. trade
war, albeit the figures comprised one economic data point only.
Also buoying sentiment was an agreement late on Thursday
between Britain and the European Union on the former's departure
from the bloc, in a step toward ending economic uncertainty that
has lingered since Britain voted over three years ago to leave.
At home, investor sentiment also benefited from a trade deal
reached between Japan and the United States which the Japanese
government said would likely boost the domestic economy by about
0.8%. The tech sector led gains after Taiwan Semiconductor
Manufacturing Co (TSMC) 2330.TW on Thursday raised its 2019
capital spending plan by up to $5 billion and forecast a nearly
10% rise in fourth-quarter revenue on strong demand for faster
mobile chips and new high-end smartphones.
Screen Holdings 7735.T , a major chip industry supplier,
gained 8.9% in heavy trade while Sumco 3436.T rose 4.6%.
Murata Manufacturing 6981.T gained 1.3%, while robot maker
Fanuc 6954.T soared 3.4% and Keyence 6861.T rose 1.5%.
On top of the Brexit deal, U.S. corporate earnings have so
far mostly beat market expectations. .N
That also raised some hopes that Japanese companies'
earnings outlook could bottom out soon. The Topix's forward
earnings per share (EPS) has declined 9% to 122.86 since peaking
in November.
Advancers outnumbered decliners by a ratio of roughly 2 to
1, reflecting improving sentiment on the economic outlook.
Defensive shares, such as food companies, underperformed, as
investors moved out of them to more cyclical shares.
NH Foods 2282.T dropped 2.1%, cosmetic firm Shiseido
4911.T declined 2.0% and Keisei Electric Railway 9009.T fell
1.6%.