Tokyo stocks to take cue from GDP, Aozora eyed

TOKYO, Nov 14 (Reuters) Japanese stocks are likely to take their direction on Tuesday from July-September gross domestic product data, which will be released 10 minutes before the start of trade.

Another focus for the market will be Aozora Bank Ltd. The lender, which is majority-owned by U.S. private equity fund Cerberus, is to list its shares on the Tokyo Exchange.

Japan's GDP is expected to have grown 0.2 percent in price-adjusted terms in July-September compared with the previous quarter, according to a Reuters poll.

But in view of recent weak data, many market participants are now expecting the GDP to come in lower than they had forecast, which could prompt continued selling of Japanese stocks, said Katsuhiko Kodama, a senior analyst at Toyo Securities.

''The view that GDP data will be weaker than expected has spread in the market, and the poor performance in small-caps markets such as the Jasdaq is not helping psychologically in building confidence among investors,'' Kodama said.

However, if the data comes in above expectations, that could encourage a rebound in the market, with technology stocks boosted by a weaker yen, Kodama said.

Shares in Aozora could decline in their IPO on Tuesday.

Shares in the lender were trading 7 to 8 percent below their pre-market IPO price in London's grey market on Monday, suggesting the issue could founder in its debut.

The Nikkei average is likely to move between 15,900 and 16,100 on Tuesday, market participants said.

It fell 0.56 percent to 16,022.49 on Monday, its lowest close in six weeks as investors sold Fast Retailing Co. Ltd. and other firms sensitive to domestic demand ahead of the GDP data.

Nikkei futures pointed to little change in the market.

December futures traded in Chicago closed at 16,040, up 30 points from their close in Osaka.

The Dow Jones industrial average rose 23.45 points, or 0.19 percent, to finish Monday at 12,131.88. The Nasdaq Composite Index gained 16.66 points, or 0.70 percent, to close at 2,406.38.

Japan's earnings season is nearing an end, but investors will also be looking ahead to corporate earnings from companies such as Japan Petroleum Exploration Co., Seiko Corp., Tokyo Electron Ltd. and Citizen Watch Co. on Tuesday.

STOCKS TO WATCH -- NTT DoCoMo Inc., Rakuten Inc.

NTT DoCoMo, Japan's biggest mobile phone operator, and Internet shopping mall Rakuten said they would offer online auctions for personal computers from Monday and for mobile phones from Nov. 20.

-- Hitachi Ltd.

Hitachi and U.S. group General Electric Co. said on Monday they would set up joint ventures in Japan and the United States to combine their nuclear power operations and capture more contracts.

-- Hitachi Zosen Corp.

Hitachi Zosen said on Monday it may give up part of its 50 percent stake in its shipbuilding business in the process of listing the company or in other realignment moves.

But it denied a Nihon Keizai Shimbun report that it would entirely pull out of the business by selling its stake in its joint venture to partner JFE Holdings Inc.

-- Kojima Co. Ltd.

The Tochigi-based electronics retailer on Monday cut its group net profit forecast for the year to March by 31 percent to 2.3 billion yen after falling short of its first half estimates due to weak sales of air conditioners and personal computers.

-- Dainippon Screen Manufacturing Co.

The precision machinery maker on Monday raised its 2006/07 group net profit forecast by 29 percent to 16.1 billion yen, citing a stronger-than-expected performance in the first half and the expectation that spending by chipmakers will remain strong.

-- Disco Corp.

The maker of semiconductor cutting and grinding equipment on Monday posted a 142 percent jump in first half group net profit and raised its full-year estimate by 9 percent, citing a strong outlook for spending by chip makers in the second half.

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