Tokyo stocks seen opening higher, Nikko Cordial in focus

TOKYO, Mar 13 (Reuters) Tokyo stocks are seen opening higher on Tuesday, extending gains for the fourth straight session, led by shares of technology companies such as Kyocera Corp. following advances in similar stocks in the United States.

Another focus of the market is Nikko Cordial Corp. The Tokyo Stock Exchange decided on Monday not to strip Nikko of its share listing over an accounting scandal in a surprise ruling that could weaken Citigroup's .8 billion takeover bid for the brokerage.

''The Nikkei is likely to extend gains following U.S. stocks,'' said Hiroichi Nishi, a general manager of equity marketing at Nikko Cordial Securities.

''But profit-taking may cap advances once the index comes close to 17,500 as the yen is becoming a bit stronger and the trade volume was sharply down in the previous session compared with last week's daily average,'' he said.

In New York, the dollar fell to an intraday low of around 117.23 yen on Monday before paring losses to 117.64 yen, still down 0.5 percent from late on Friday.

A stronger yen weighs on exporters as it cuts the value of their overseas sales when translated back into the Japanese currency.

Nikkei futures contracts expiring in June finished at 17,290 in Chicago, up 10 points from the close in Osaka The Nikkei is likely to move between 17,150 and 17,400 on Tuesday, market participants said.

The benchmark gained 0.75 percent on Monday to end at 17,292.39, extending a rally for the third straight session to its highest close since March 1. The index has gained 0.39 percent this year.

Citigroup has reiterated its intention to acquire Nikko, the third-largest Japanese brokerage, in what would be its biggest-ever deal in Asia, but said it would not change its offer of 1,350 yen a share. The Tokyo bourse's decision to keep the issue listed, however, could embolden investors who are unhappy with the Citigroup offer price to hold out for a better deal.

U.S. stocks advanced on Monday, helped by deal news, cheaper oil and positive broker comments on the chip sector. The Nasdaq Composite Index rose 0.62 percent and the Dow Jones industrial average was up 0.34 percent.

STOCKS TO WATCH -- Hitachi Ltd.

Japan's Hitachi has decided to sell its controlling stake in motor-making subsidiary Japan Servo Co. Ltd. to Nidec Corp. as part of its efforts to streamline group operations, the Nikkei business daily said on Tuesday.

-- Eisai Co. Ltd.

Japanese drug maker Eisai Co. Ltd. will likely post a 7 percent rise in net profit to a record 75 billion yen (7.6 million) for the year starting in April, thanks to brisk overseas sales of its Alzheimer's drug Aricept, the Nikkei business daily reported on Tuesday.

-- Millea Holdings Inc.

Japanese insurance company Millea said on Monday it would cancel 19 million shares, or 2.3 percent of its outstanding stock, on March 19.

-- Matsushita Electric Industrial Co. Ltd.

Matsushita said on Monday it aims to raise its sales in Europe by 10 percent next business year, the same growth rate for a year earlier, by focusing on flat TVs, digital cameras and advanced camcorders.

-- Murata Manufacturing Co. Ltd.

Murata on Monday raised its 2006/07 dividend forecast to 90 yen from its earlier planned 80 yen.

-- Dai Nippon Printing Co.

The printing company said on Monday that a former employee of a subcontractor had stolen about 8.6 million articles of information on customers of 43 clients including Toyota Motor Corp.

-- Takeda Pharmaceutical Co. Ltd.

Japan's top drugmaker said on Monday it would buy unlisted British drug research firm Paradigm Therapeutics Ltd, in a deal that will help Japan's top drug maker boost its expertise in identifying drug targets.

-- Sapporo Holdings Hedge fund Steel Partners, which is attempting to take over Japanese brewer Sapporo Holdings, on Monday urged Sapporo shareholders to reject their company's defence against hostile takeovers.

Reuters AD VP0545