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Nikkei likely to open lower on China growth fears
March 20, 2012 / 11:28 PM / 6 years ago

Nikkei likely to open lower on China growth fears

TOKYO (Reuters) - Japan’s Nikkei average is expected to open lower on Wednesday after stocks fell overnight on fresh concerns over China’s economic growth, though the softer yen is likely to underpin market sentiment and support the index.

A woman smiles as she walks past an electronic board displaying graphs showing recent movements of Japanese market indices, outside a brokerage in Tokyo February 15, 2012. REUTERS/Yuriko Nakao

Market players said the Nikkei was likely to trade between 10,050 to 10,200 on Wednesday after Nikkei futures in Chicago closed at 10,045, down 35 points, or 0.35 percent, from Monday’s Osaka close of 10,080. There was a public holiday in Japan on Tuesday.

“The focus today will be on whether the Nikkei can hold the 10,100 level in the morning session and then to see how it reacts to Chinese markets in the afternoon,” said Masayuki Doshida, senior market analyst at Rakuten Securities.

“Growth worries about China will lead to selling of energy stocks and commodity related shares, as well as stocks that have high exposure to China’s economy such as Komatsu and Fanuc,” said Doshida.

Wall Street slipped overnight after global mining giant BHP Billiton said it saw signs of “flattening” iron-ore demand from China, the world’s top metals consumer, weighing down commodity markets and energy shares.

But strategists said the softer yen against the euro and the steady dollar/yen rate would likely to support the overall market.

The euro was last trading at 110.710 yen on the EBS platform, while the greenback was at 83.67 yen.

Also offsetting concerns about China’s growth, U.S. economic data remained robust in February, with permits for U.S. homebuilding nearing a 3-1/2 year high last month even as groundbreaking activity slipped, suggesting a nascent recovery in the housing sector was still on track.

On Monday, the benchmark Nikkei .N225 closed 0.1 percent higher at 10,141.99 after touching an 8-1/2-month intraday peak of 10,172.64, while the broader Topix index .TOPX added 0.2 percent to 868.35.

> Wall St slips on China, but retailers offset losses .N > Dollar rises as China fears boost safe-haven allure <FRX/> > Long bond yields fall, but higher yields may lie ahead <US/> > Gold falls as economic optimism boosts dollar <GOL/> > Oil falls as Saudi Arabia seeks to calm markets <O/R>

STOCKS TO WATCH

-- NISSAN MOTOR CO (7201.T)

Nissan’s revived Datsun brand will target increasing sales in Indonesia, India and Russia, the firm’s chief executive told reporters in Jakarta on Tuesday. Nissan said it plans to invest $400 million in Indonesia over the next two years, double hiring by 2014 and increase its dealerships in Southeast Asia’s largest economy.

Separately, Chinese media said on Monday, Nissan and Dongfeng Motor Group Co (0489.HK) will spin off the heavy truck segment of their China venture to Dongfeng’s state parent, paving the way for local production of Renault and Infiniti cars.

--NISSHIN STEEL 5407.T, NIPPON METAL 5479.T

Nisshin Steel Co will acquire Nippon Metal Industry Co in a stock swap deal valued at $180 million and plan to combine their businesses on October 1 under a holding company, the firms said in a statement on Monday.

--MITSUBISHI MOTORS CORP (7211.T)

Car maker Mitsubishi Motors plans to double production at its automobile plant in Illinois to 70,000 vehicles per year, the Nikkei business daily Nikkei reported on Tuesday.

--OLYMPUS CORP (7733.T)

Scandal-hit Olympus will unveil three new products, including endoscopes on Wednesday, its first major product launch since a $1.7 billion accounting fraud last year threatened the 92-year-old firm’s survival.

Reporting by Mari Saito; Editing by Joseph Radford

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