* Nikkei up 0.8 pct by midmorning
* Portuguese bond sale eases sovereign debt worries
* Easing European fiscal worry boosts appetite for equities
* Property, financials lead advance for 2nd straight day
By Antoni Slodkowski
TOKYO, Jan 13 (Reuters) - The Nikkei stock average rose to an eight-month intraday high for a second straight day on Thursday, after a successful bond auction in Portugal eased fears about the euro zone's debt crisis and lifted European and U.S. shares.
Financials, which led Wednesday's advance, extended gains as foreign investors continued adding underweight banking stocks to their portfolios. Mitsubishi UFJ Financial Group, Japan's biggest bank by assets, gained 1.3 percent.
The property sector was also among the top gainers, adding 2.3 percent, as foreign funds continued piling into undervalued real estate shares supported by the Bank of Japan's asset buying scheme.
The property sector has gained around 20 percent since the scheme was launched in October, outperforming the Nikkei's 13 percent rise over the same period.
"The strong bond auction in Portugal has calmed the markets and with no major negative factors in sight, foreign funds continue buying lagging banking and property shares," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.
By midmorning the benchmark Nikkei was up 0.8 percent, or 80.98 points, at 10,593.78. Its immediate resistance looms at the May 13, 2010 high of 10,638.23. The next target eyed by investors is the 10,847.90 level recorded at May 6.
The broader Topix added 0.8 percent to 936.60.
"Foreigners are buying property, encouraged by the BOJ's scheme and because they seem cheaper compared to the surging property shares in China," said Akino, who predicts foreign buying will continue until at least June, provided that exchange rates remain steady around current levels.
The Nikkei, while sharply underperforming other major indexes in 2010, has added over 15 percent since the start of November, with foreign investors net buyers of Tokyo stocks in the week to Jan. 1 for a ninth straight week.
After less than an hour of trade, trading volume already stood at 650 million shares, indicating a strong presence of long-term Euoropean pension funds, said traders.
Wednesday marked the most active trading day this year with around 2.5 billion shares changing hands the Tokyo Stock Exchange's first section.
"The Nikkei has had a very strong start to the year, so we may also see some profit-taking, but the overall trend is for the index to go up," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
The healthy bond auction in Portugal drove investors into riskier assets. Investors were hopeful euro-zone finance ministers would beef up the European Union's rescue fund. (Editing by Chris Gallagher)