Tokyo shares open 0.50 pc higher

Tokyo share prices opened 0.50 per cent higher on Thursday, following an upturn on Wall Street overnight and reported merger talks between Japanese manufacturing giants.

The benchmark Nikkei-225 index opened up 48.36 points at 9,685.50. Investor sentiment may be lifted by reported merger talks between Hitachi and Mitsubishi Heavy, said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities.

"Such a 'mega' M&A deal will likely rally shares," he told Dow Jones Newswires. But he added "the companies' reliance on their nuclear power businesses -- which is apparently the driver of the merger talks -- may cap sharp gains," he said.

US stocks closed higher yesterday, as the Dow Jones Industrial Average ended an eight-day losing streak and markets regained some ground lost in Tuesday's brutal sell-off.

The Dow average of 30 blue-chip stocks rose 29.82 points (0.25 per cent) to close at 11,896.44. Technology shares rose, as did Mastercard, which reported better-than-expected second-quarter earnings.