Nikkei seen moving little as focus turns to GDP

Tokyo, Nov 13: Tokyo stocks may move little on Monday due to continued concern about the strength of Japan's domestic economy and as investors look ahead to third-quarter gross domestic product data due the following day.

Investors may return to shares of Daiichi Sankyo Co. Ltd. and other pharmaceutical stocks, which have been battered in recent sessions.

But ongoing concern about the strength of the world's second-largest economy is likely to weigh on the Tokyo market, said Hiroichi Nishi, a general manager of equity marketing at Nikko Cordial Securities.

''The Nikkei is expected to move little today because of concerns over GDP,'' Nishi said.

''But losses are likely to be limited because there is a sentiment in the market that the Nikkei and Topix are oversold.'' Pharmaceutical companies may be among those oversold, he added.

Weaker-than-expected machinery orders data on Friday heightened concern about Japan's economic strength.

Japanese GDP data for July-September is due to be released before the start of trade on Tuesday. GDP is expected to have grown 0.2 percent in price-adjusted terms during the period, compared with the previous quarter, according to a Reuters poll.

Nikkei futures pointed to little change in the market.

December futures traded in Chicago closed at 16,090, up 10 points from their close in Osaka The Nikkei is likely to move between 16,000 and 16,250, market participants said.

It booked its lowest close in more than a month on Friday, hit by the weaker-than-expected machinery data, closing down 0.53 percent at 16,112.43.

The Dow Jones industrial average rose 5.13 points, or 0.04 percent, to finish Friday at 12,108.43. The Nasdaq Composite Index gained 13.71 points, or 0.58 percent, to close at 2,389.72.

Investors will also be looking ahead to corporate earnings from companies such as Isuzu Motors Ltd.

STOCKS TO WATCH

-- Hitachi Zosen Corp., JFE Holdings Inc.

JFE Holdings is likely to acquire Hitachi Zosen's shipbuilding operations by buying out its stake in their 50-50 joint venture, Universal Shipbuilding Corp., marking Hitachi Zosen's effective departure from shipbuilding, the Nihon Keizai Shimbun reported on Saturday.

JFE, the world's No.4 steelmaker, said on Friday it planned to buy back up to 5.11 percent of its outstanding stock worth some $1 billion to use the shares for strategic alliances and other purposes.

-- Rex Holdings Co. Ltd.

Rex, which operates ''am/pm'' convenience stores and the ''Gyukaku'' chain of barbecued beef restaurants, announced on Friday its plans for a $505 million management buyout with the help of private equity firm Advantage Partners.

-- Sega Sammy Holdings Inc.

The holding company for game software maker Sega Corp. and slot machine maker Sammy Corp. on Friday cut its annual net profit forecast by 20 percent due to sluggish sales of pachinko machines.

-- Sawai Pharmaceutical Co. Ltd Japan's top generic drug maker posted a 45 percent rise in first-half profit on Friday and projected bullish growth over the next two business years as the use of generic drugs grows sharply on new government regulations.

-- Nippon Telegraph and Telephone Corp. (NTT) Japan's largest telecoms carrier said on Friday that profit fell 9.4 percent in the first half on lower revenue from voice calls and higher costs at its wireless unit.

-- Marui Co.

The department store operator said on Friday that it would significantly downsize its consumer loan business due to an expected move by regulators to lower the maximum interest rate on loans, the Nihon Keizai Shimbun reported on Saturday.

-- Best Denki Co. Ltd.

The electronics retailer said on Friday it would spend about 2.5 billion yen to buy new shares to be issued by unlisted rival Sakuraya Co. on Dec. 1, giving it a 40 percent stake. The stake of investment fund Phoenix Capital will fall to about 60 percent.

-- Tokyu Land Corp.

The real estate developer on Friday raised its 2006/07 group net profit forecast by 10 billion yen to 30 billion yen, helped by a special profit on the sale of property as part of its efforts to rehabilitate its ailing retail unit, Tokyu Hands.

-- Resona Holdings Inc.

Japan's fourth-biggest bank plans to tap retained earnings and raise 700-800 billion yen from institutional investors and financial institutions to repay its 2.9 trillion yen worth of public funds, the Nihon Keizai Shimbun reported on Saturday.

Reuters