Tokyo up by break, Sharp soars on takeover reports

Tokyo up by break, Sharp soars on takeover reports

TOKYO - Tokyo stocks rose Thursday morning as oil prices rebounded, while struggling Sharp soared on reports it has accepted a multi-billion-dollar bailout from the parent company of Taiwan's Foxconn.

The takeover, which could be worth as much as $6.2 billion (S$8.7 billion), was agreed at a Sharp board meeting Thursday, Japanese media including the leading Nikkei business daily reported.

Sharp's volatile stock jumped nearly six per cent on the news, before ending the morning 4.02 per cent higher at 181 yen.

The reports ended weeks of speculation over whether Sharp would choose an offer from a domestic investment fund or Taiwan-based Hon Hai Precision, a major Apple supplier.

Neither firm has so far confirmed the deal, which would be a rare foreign takeover of a Japanese firm.

At the break, Tokyo's benchmark Nikkei 225 index was up 0.70 per cent, or 111.24 points, to 16,027.03, rebounding from the previous day's losses.

The broader Topix index of all first-section shares gained 1.06 per cent, or 13.66 points, to 1,298.19.

Sentiment also got a boost from gains on Wall Street, where US stocks pushed higher as crude prices rebounded from a slump of more than four per cent in the previous session.

"You need to see some settling in the oil price and maybe we're getting there on that one," Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, told Bloomberg News.

"That could be ticked off as a positive but we still need to see more evidence that central banks are doing what they can to stabilise the situation." Investor's spirits were buoyed further by speculation China will ramp up stimulus to boost its slowing economy - the world's second-largest and a key driver of global growth.

Markets are also closely watching a meeting of finance and central bank chiefs from the Group of 20 starting Friday in Shanghai.

In Tokyo share trading, mobile carrier SoftBank surged 4.20 per cent to 5,545 yen. Media reports have suggested Hon Hai would buy SoftBank shares as it looks to keep the mobile carrier as a key buyer of Sharp products.

The rebound in crude prices boosted commodity-linked firms, with energy explorer Inpex rising 1.29 per cent to 832 yen and JX Holdings gaining 0.87 per cent to 450.7 yen.

In forex markets, the dollar edged up to 112.17 yen from 112.15 yen Wednesday in New York and 111.88 yen late afternoon in Tokyo.

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