(Adds stocks, details)
By Elaine Lies
TOKYO, Feb 25 (Reuters) - Japanese stocks climbed more than 2
percent on Monday, with Millea Holdings <8766.T> and other
insurers powering higher after talk of a U.S. bond insurer rescue
plan eased concerns about the subprime loan crisis.
Another boost came from a report in Britain's Times newspaper
that China's sovereign wealth fund planned to buy as much as $10
billion in Japanese stocks and could consider purchasing a large
stake in oil and gas developer Inpex Holdings Inc <1605.T>, which
also climbed. []
U.S. stocks staged a late rally on Friday on news that banks
were near a deal to bail out bond insurer Ambac Financial, and
that a rescue could come this week, though a source told Reuters
that while progress has been made the deal might still fall
through.
Still, investors seized on the news in Tokyo.
"One, it's the bond insurer rescue. Two, it's the bond
insurer rescue," said Katsuhiko Kodama, a senior strategist at
Toyo Securities Co Ltd.
"The China sovereign fund news is interesting but this is
mainly a buying factor for specific stocks, not something that
will necessarily lift the whole market."
But he and others remained wary even while cheering the rise.
"Of course there's questions about how much you can trust
this sort of news and it's not a full solution to the subprime
problems," said Noritsugu Hirakawa, a strategist at Okasan
Securities.
"Still, the mood of things has changed."
Market participants said that while stocks had touched bottom
and the level was gradually rising, it was hard to see sustained
gains keeping the Nikkei average above 13,800 -- which was a
selling point during a rally earlier this month -- for a while.
The benchmark Nikkei <> was up 2.1 percent at 13,780.35
by midsession after earlier rising as high as 13,850.16. The
broader TOPIX index <> was up 1.9 percent at 1,346.56, after
earlier also rising more than 2 percent.
INSURERS ENGROSSING
Insurers surged on the Ambac rescue talk, with Mitsui
Sumitomo Insurance Co Ltd <8752.T> climbing 10.6 percent to 1,111
yen, Sompo Japan Insurance <8755.T> jumping 9.7 percent to 981
yen and Millea Holdings up 8.1 percent at 4,000 yen.
Aioi Insurance Co <8761.T> surged 16.7 percent to 524 yen
even after saying it now expected to fall into the red this year
with losses on subprime-related investments expected to balloon
to about $857 million. []
As a result, insurance <.IINSU.T> was the greatest gainer
among the subindices, rising 7.9 percent. The banking subindex
<.IBNKS.T> rose 3.2 percent, also on positive sentiment over a
possible Ambac rescue.
Sharp Corp <6753.T> jumped 4.2 percent to 2,080 yen after a
source close to the issue said Sony Corp <6758.T> was planning to
start buying TV-use liquid crystal display panels from Sharp,
perhaps as early as the business year starting in April -- news
that market participants said contributed to the overall good
mood.
Sony currently runs an LCD panel joint venture with Samsung
Electronics Co Ltd <005930.KS>, but procurement from Sharp would
help it secure panels to meet fast-growing demand for LCD TVs
without heavy capital investment.
Sony was up 1.6 percent to 5,100 yen.
Trade picked up on the Tokyo exchange's first section, with 1
billion shares changing hands compared with last week's morning
average of 961 million shares.
Advancing stocks outnumbered decliners by a ratio of more
than six to one.
(Reporting by Elaine Lies, Editing by Michael Watson)
