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Nikkei seen trapped in range after recent rally
August 21, 2012 / 11:23 PM / 5 years ago

Nikkei seen trapped in range after recent rally

TOKYO (Reuters) - Japan’s Nikkei share average is expected to hold in a range on Wednesday, as U.S. stocks fell despite mounting expectations the European Central Bank will soon act to tackle the region’s debt crisis.

“Today will likely be a rangebound trading day, with the stronger euro and weaker yen in focus,” said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.

The Nikkei .N225 was expected to trade between 9,100 and 9,250, strategists said, while Nikkei futures in Chicago closed at 9,155 on Tuesday, up 0.05 percent from the Osaka close.

On Tuesday, the Nikkei retreated from a three-month high to 9,156.92 but held above its 26-week moving average at 9,149.50. The broader Topix .TOPX index inched up 0.1 percent to 765.26.

Expectations that the ECB would take bold action to contain the euro zone debt crisis have helped the Nikkei rebound 10 percent from a seven-week low touched on July 25. The Nikkei is up 8.3 percent so far this year.

The euro rose as high as 99.18 yen in overnight trade, its strongest since early July. It was last trading at 98.78.

Goldman Sachs reiterated its six- and 12-month Topix targets of 850 and 930 respectively, or 11 and 22 percent upside from Tuesday’s close.

“The combination of dissipating global marco risks and improving domestic macro and micro fundamentals will help lower the market’s risk premium and drive Topix higher,” Goldman Sachs said in a report.

“Given the sharp rise in just the past four weeks, we expect the market to digest recent gains near-term,” it said, adding that its three-month target remained 775.

The brokerage said it was overweight capital goods, transportation, automobiles .ITEQP.T, banks .IBNKS.T and real estate .IRLTY.T.

> Wall St slips after S&P 500 hits four-year high .N > Euro hits 7-wk high on speculation ECB will take action <FRX/> > Treasuries little changed, ECB plans in focus <US/> > Gold up 1 pct at 3-1/2-month high on ECB stimulus talk <GOL/> > Oil rises on euro zone hopes, supply worries <O/R>


--INPEX CORP (1605.T)

Japan’s top oil and gas explorer Inpex said on Tuesday it has agreed to acquire a 9.9 percent stake in Angola’s offshore block 14 from France’s Total (TOTF.PA).

Reporting by Dominic Lau and Lisa Twaronite; Editing by Richard Pullin

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