*Trading houses gain on rise in oil prices
*Property shares hit after midsize developer Zephyr folds
*High tech issues hurt by Apple, SanDisk results
(Adds stocks, details)
By Elaine Lies
TOKYO, July 22 (Reuters) - Japan's Nikkei stock average
advanced 1.3 percent on Tuesday as Itochu Corp <8001.T> and other
trading houses climbed after oil rose more than $3 in the
previous session, but gains were tempered by worry about the U.S.
economy.
Disappointing results for U.S. high tech firms weighed on
Japanese tech shares, while property developers slumped after
Zephyr Co <8882.T> filed for court-led rehabilitation, the
largest failure of a listed firm in Japan for nearly five years
[].
System problems that forced the halt of trade in all futures
and options contracts dampened upward momentum for the Nikkei,
some market players said. But others said the problems were not
having much of an impact. []
Oil rose on Monday as a tropical storm threatened the Gulf of
Mexico and stoked concerns of disruptions to U.S. offshore oil
and gas production [].
"Certainly the gains in oil have boosted trading houses, but
coal and other commodities' prices are also high, and this is
helping them out too," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
Disappointing U.S. results emerged after the bell from a raft
of companies, including Apple <AAPL.O>, Texas Instruments
<TXN.N>. Flash memory card supplier SanDisk <SNDK.O> posted a
loss, depressing some high tech shares in Tokyo and raising fears
about Wall Street's performance later in the day.
"The Nikkei at under 13,000 is oversold, but bad results out
of the U.S. after hours has fuelled concerns about the economy
over the long-term, and this will inhibit active buying,"
Yamagishi added.
The market will be keenly watching quarterly results from
Shin-Etsu Chemical Co Ltd <4063.T>, the world's biggest maker of
silicon wafers, which are due out at 0400 GMT.
"The performance of high-tech shares is something that must
be closely watched as a clue to the broader economy," said
Noritsugu Hirakawa, a strategist at Okasan Securities.
The benchmark Nikkei <> gained 165.31 points to
12,969.01, while the broader Topix <> rose 0.9 percent to
1,263.78.
PROPERTY PRESSURED
Fears for Japan's vulnerable property market, already
battered by the global credit crunch and falling land prices,
were further fanned by Zephyr's failure with about $893 million
in debt.
Fellow midsize developers tumbled, with Urban Corp <8868.T>
tanking 22 percent to 131 yen and Creed Corp <8888.T> losing 6.8
percent to 78,600 yen. Zephyr was hit by a glut of sell orders at
14,700 yen, down 12 percent from Friday's close of 16,700.
Mitsui Fudosan Co Ltd <8801.T>, Japan's largest real estate
developer, dropped 1.9 percent to 2,270 yen, becoming the sixth
largest drag on the Nikkei 225 by volume weight. Sumitomo Realty
& Development <8830.T> fell 1.9 percent to 2,060 yen.
High tech shares were troubled after SanDisk's quarterly
results swung sharply to a loss amid an unexpected turn in sales,
and it warned worse was in store as it further slashes memory
chip prices in the current quarter [].
Toshiba Corp <6502.T> in particular suffered after SanDisk,
with which it jointly makes NAND-type flash memory chips for use
in portable music players and mobile phones, said it was delaying
the next phase of expansion at a joint chip production plant.
Toshiba dropped 2.6 percent to 710 yen, while Advantest Corp
<6857.T> fell 2.6 percent to 2,255 yen and Tokyo Electron
<8035.T> lost 1.8 percent to 6,020 yen.
But these losses were outweighed by strong gains for trading
houses, with Itochu up 6.3 percent to 1,052 yen and fellow trader
Mitsui & Co <8031.T> up 4.2 percent to 2,120 yen. Marubeni Corp
<8002.T> joined the upward march, rising 4.1 percent to 764 yen.
Trade was thin, with 763 million shares changing hands,
compared with last week's morning average of 858 million.
Advancing shares beat declining ones by more than two to one.
(Reporting by Elaine Lies; Editing by Edwina Gibbs)
