November 6, 2018 / 2:53 AM / 10 months ago

Nikkei rebounds on Wall St gains, Apple suppliers underperform

* Nikkei seen in rangebound before U.S. midterm elections

* Japan Display tumbles after report Apple cancels production boost

* SoftBank volatile on uncertainty over Vision Fund

By Ayai Tomisawa

TOKYO, Nov 6 (Reuters) - Japan’s Nikkei rebounded on Tuesday morning tracking gains in Wall Street, while Apple suppliers fell on a report that the tech giant has cancelled plans to boost production for its new iPhone XR.

The Nikkei share average rose 1.0 percent to 22,114.65 in midmorning trade, recouping some of the 1.6 percent loss on Monday.

With potentially market-moving U.S. midterm elections scheduled later in the day, trading is expected to be range-bound, traders said.

“Investors are cautious, and the Nikkei will likely be contained in a narrow range today,” said Hikaru Sato, a senior technical analyst at Daiwa Securities, adding that a level between 22,000-22,500 is seen “comfortable” to most investors for now.

“Anywhere below that range is seen cheap and anywhere above that level is considered overheating.”

Opinion polls show strong chances that Democrats may win control of the House of Representatives in the elections after two years of wielding no practical political power in Washington, with President Donald Trump’s Republican Party likely to keep the Senate.

Buying was particularly strong in recent beaten-down stocks, with 32 of the Topix’s 33 subsectors in positive territory. Automakers gained ground, with Toyota Motor rising 1.6 percent and Honda Motor advancing 2.2 percent.

SoftBank Group Corp, which booked bright earnings for July-September, pulled back 0.7 percent after soaring as much as 4 percent in early trade.

It posted an operating profit of 705.7 billion yen ($6.23 billion), helped by higher valuations on high-tech bets by the Saudi-backed Vision Fund, compared with 395.6 billion yen a year earlier under different accounting standards.

However, traders said there was uncertainty about Vision Fund’s future amid a global outcry over the killing of a prominent journalist by Saudi security personnel.

Apple suppliers were sold after the Nikkei business daily reported on Monday evening that Apple Inc has told its smartphone assemblers Foxconn and Pegatron to halt plans for additional production lines dedicated to the iPhone XR which launched last month.

Japan Display Inc dropped more than 4 percent, TDK Corp shed 2 percent and Nitto Denko Corp dropped 1.3 percent.

The broader Topix gained 1.1 percent to 1,658.03. (Editing by Shri Navaratnam)

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