Tokyo shares up 1.16% by lunch

Tokyo stocks rose 1.16 percent in Tuesday's morning session, lifted by positive leads from Wall Street and European markets.

The Nikkei index at the Tokyo Stock Exchange rose 162.98 points to 14,272.32. The Topix index of all first section shares rose 1.33 percent, or 15.57 points, to 1,188.15.

The rebound came after the Nikkei on Tuesday ended in the red, in line with an Asian sell-off and following a credit downgrade for index heavyweight SoftBank.

Standard & Poor's cut the mobile phone carrier two notches to BB+ -- making it a junk bond -- after it bought US-based Sprint Nextel for more than $20 billion.

"The fact that the negative SoftBank reaction lasted only one session reflects the broader market's strength," Tatsunori Kawai, chief strategist at kabu.com, told Dow Jones Newswires.

Meanwhile, investor spirits brightened on expectations for solid US corporate earnings, after Alcoa announced a positive outlook despite losses in the second quarter, mainly due to one-off costs.

"The upbeat mood for equities heading into the start of US earnings reporting season should have a generally positive influence on stocks," said Hiroichi Nishi, SMBC Nikko Securities general manager of equities.

"Results from financials, including JP Morgan Chase later this week, will be closely watched," Nishi said.

A relatively stable dollar was the key for the Tokyo market to sustain the current momentum, Nishi added.

The US currency stood at 101.05 yen, from 100.99 yen in New York Monday.

The euro bought $1.2853 and 129.88 yen, compared with $1.2868 and 129.96 yen.

On Wall Street the Dow rose 0.59 percent, the S&P 500 added 0.53 percent and the Nasdaq put on 0.16 percent

bur-hih/hg/dan