By Brad Frischkorn TOKYO--Tokyo stocks rose Wednesday, as short-covering in Softbank and a strong euro helped fuel a broad market rally strong enough to overcome weakness in heavily weighted chip-related shares after Intel's disappointing outlook. The Nikkei Stock Average added 105.24 points, or 1.2%, to 8806.55 following the prior session's 1.4% rise. It was the first close above the 8800 mark since Oct. 5. The Topix index of all the Tokyo Stock Exchange First Section issues also added 7.39 points, or 1.0%, to 739.79, with 32 of 33 subindexes ending in positive territory. Overall volume totaled 1.83 billion shares, the highest since Sept. 20. "The formerly risk-averse mood is gradually wearing off," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities, noting the euro's rise to a one-month high against the yen, helped by news that Germany would support a precautionary credit line for Spain. The euro was seen changing hands above the Y103 mark for much of the stock trading session. Traders pointed out that valuations remain very cheap, inhibiting further strong selling momentum. Softbank rose for the second straight session following confirmation of its massive stake buy in U.S. wireless carrier Sprint Nextel on Monday. Shares closed up 5.6% at Y2,625, unperturbed by S&P's Tuesday statement that Softbank's credit rating could be cut to BB (speculative) if the Sprint purchase plan goes through. "Short-covering remains the main driver at the moment, regardless of S&P," said Tatsunori Kawai, chief strategist at kabu.com. "No equity financing for the Sprint deal is a huge relief to investors." Fellow Nikkei heavyweights Fast Retailing and Fanuc also rose, adding 2.2% to Y16,540 and 1.9% to Y12,640, respectively. Among euro-sensitive shares, Sony added 2.0% to Y956, while Canon also gained 0.9% to Y2,542. Real estate shares outperformed the major indexes, with Mitsui Fudosan rising 1.8% to Y1,614 and Mitsubishi Estate gaining 2.4% to Y1,565, partially on speculative hopes for more policy easing steps at the next Bank of Japan policy board meeting slated for end-October. Nomura Securities analyst Daisuke Fukushima reiterated his bullish stance on the sector, especially office related developers, citing "a major bottoming out" of fundamentals, as evidenced by a peaking off office vacancy rates within the five central Tokyo wards, as well as stable near-term earnings. Fallout from Intel Corp.'s overnight 3Q profit decline was limited, with Advantest sliding 2.2% at Y918 and Tokyo Electron closing down 0.3% at Y3,510. The pair came under late additional pressure after Dutch semiconductor-manufacturing equipment maker ASML cut its second half net sales guidance. Monex market analyst Toshiyuki Kanayama noted, however, that stock prices had largely already factored in weak results from industry leaders. December Nikkei 225 futures closed up 90 points, or 1.0%, at 8800 on the Osaka Securities Exchange. Write to Bradford Frischkorn at bradford.frischkorn@dowjones.com

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