Nikkei inches up, short-covering run its course before U.S. result

Wed Nov 7, 2012 7:06am IST

Related Topics

* Investors stay on sidelines before U.S. result
    * Nissan surges on hopes for growth in North America

    By Ayai Tomisawa
    TOKYO, Nov 7 (Reuters) - Japan's Nikkei share average inched
up on Wednesday on short-covering helped by gains in U.S.
stocks, but the index is expected to hold a tight band as
investors await the result of the U.S. presidential election.
    Traders said that in early trade, investors covered their
short positions from early this week encouraged by a rise in
U.S. stocks as investors looked forward to definitive U.S.
election results. They added that the market is looking forward
to a U.S. leader who can act decisively to avert the legislated
"fiscal cliff" of spending cuts and tax hikes.
    The Nikkei was up 0.1 percent at 8,981.66 after trading
above the 9,000 mark earlier. The broader Topix also
rose 0.2 percent, to 746.03.
    "Short-term buying has run its course as investors quickly
stayed on the sidelines," said Fujio Ando, senior managing
director at Chibagin Asset Management. "Fundamentally, nothing
has changed from the previous days. Japanese corporate earnings
have disappointed the market, and the market lacks a trading cue
besides the U.S. election for now."
    Democrat President Barack Obama and Republican challenger
Mitt Romney are in a tight race as vote counts started in a few
states. Obama and Romney have been neck-and-neck since their
first debate in early October..
    "All eyes are on the outcome of the election, so once the
market rises in early trade, it will probably stay in a narrow
range," said Kenichi Hirano, a strategist at Tachibana
Securities, adding that the Nikkei may stay between 8,950-9,100
on Wednesday.
    Nissan Motor Co surged 4.3 percent to 706 yen on
expectations of strong growth in sales in North America despite
cutting its full-year operating profit forecast below market
expectations. 
    Nomura Securities lifted its price target on the automaker
to 880 yen from 830 yen and reiterated its 'buy' rating.
    "We view the downward revision to 13/3 (March 2013)
operating profit guidance of 125 billion yen as negative in that
it exceeded our expectations for a 50 billion downward revision,
but signs of earnings improvement in North America were already
evident in July-September," Nomura said in a note.
     DeNA Co Ltd climbed 3.6 percent to 2,688 yen,
hitting its highest level in six weeks after the social gaming
company's first-half operating profit beat its own guidance.
    The benchmark Nikkei is up 6.1 percent this year, trailing a
13.6 percent rise in the U.S. S&P 500 and a 12.4 percent 
gain in the pan-European STOXX Europe 600 index.
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