TOKYO, Mar 24 (Reuters) The Nikkei share average added 0.43 per cent on Friday as energy stocks gained on high oil prices and property stocks climbed after a survey showing a pickup in land prices, but falls in technology stocks limited the market's gains.
Nikko Cordial Corp. fell after sources told Reuters that Japan's third-biggest brokerage was seeking a controlling stake in Tokyo Star Bank Ltd.
Analysts said the market was in a tight range, and with many corporations closing their books at the end of March, investors are not in a hurry to buy stocks. Trade was thin with daily turnover on the Tokyo Stock Exchange's first section breaking below 2 trillion yen for the first time since Nov. 1, 2005.
''We are coming up to the fiscal year end ... and when the U.S.
has a little bit of a hiccup, oil takes a bit of rise, it just means that 'I don't really need to go in and jump in today,''' said Kirby Daley, a strategist at Fimat.
The Nikkei rose 71.50 points to 16,560.87. On the week, the benchmark average was up 1.35 per cent, rising for the third week in a row.
The TOPIX index was up 0.55 per cent at 1,689.34.
Junichi Misawa, senior fund manager at STB Asset Management, said investors' focus is now on earnings announcements, which will kick off next month.
''Many companies will likely produce very conservative outlooks for 2006/07, and expectations that upward revisions are likely could help the market test new highs,'' he said.
Energy stocks rose following a more than $2 jump in U.S. crude oil futures on Thursday.
Cosmo Oil Co. advanced 3.2 per cent to 611 yen and Nippon Oil Corp. gained 2.1 per cent to 917 yen.
Sumitomo Realty&Development Co. Ltd., Japan's third-largest property developer, added 2.6 per cent to 2,990 yen. A government survey of land prices released on Thursday showed price rises in some cities for the first time in 15 years.
Higher land prices in the Nagoya area in central Japan helped shares in Nagoya Railroad Co. Ltd. to rise 5.6 per cent to 450 yen, while Maruei Department Store Co. Ltd., a Nagoya retailer, gained 7 per cent to 337 yen.
Nikko Cordial dropped 1.5 per cent to 1,944 yen. A source close to the deal told Reuters that Nikko Cordial plans to buy up to 50 per cent of Tokyo Star Bank in a deal worth about $1.3 billion.
Tokyo Star Bank shot up 10.2 per cent to 431,000 yen.
Fimat's Daley said banks and brokerages stand to benefit from any stock market rises and an economic pickup, and if they expand through similar acquisitions they would benefit more.
''The larger brokerages will be the ones that benefit most, and clearly this is sort of a first to see them go after a regional bank, but it makes a lot of sense. We may expect to see more of it,'' he said.
Technology stocks struggled after Deutsche Securities analysts Fumiaki Sato and Masaki Taketsume said the sector outlook appears dim.
''The earnings of many Japanese electronics companies are heavily influenced not only by domestic economic conditions but also by the semiconductor cycle and other global tech cycles,'' the two said in a report on Thursday.
''We cannot foresee high earnings growth in the fiscal year to March 2007 as the semiconductor cycle is already flattening.'' Advantest Corp., a maker of semiconductor testing equipment, dropped 0.7 per cent to 13,050 yen, while TDK Corp. fell 1.7 per cent to 8,790 yen.
Trade was slow, with 1.46 billion shares changing hands on the Tokyo bourse's first section, the lowest total since July 26.
Gainers outnumbered decliners 835 to 708.
REUTERS SD PM1428