Nikkei dips after rally; faces resistance near 9,750

* Profit-taking weighs after gain of 6 pct in 4 sessions

* Nikkei facing resistance around 9,750-9,800

* Euro’s weakness hurts precision machinery shares

By Chikafumi Hodo

TOKYO, Nov 9 (BestGrowthStock) – Japan’s Nikkei average edged down on
on Tuesday as investors pocketed profits following a more than 6
percent jump over the previous four sessions, but the market
lacked direction amid a dearth of fresh factors.

The Nikkei was confined to a narrow range, with profit-taking
dominant in thin trading as investors could not find strong
reasons to add more positions with shares in Hong Kong (.HSI: ) and
Shanghai (.SSEC: ) also under pressure.

“It’s about time to take profits as the Nikkei has rapidly
climbed above 9,700, which is the upper end of its recent range,
so the market became cautious about buying further,” said Tomomi
Yamashita, a fund manager at Shinkin Asset Management.

“The Nikkei would need help from other markets to extend
gains from here,” Yamashita said.

The benchmark Nikkei (.N225: ) ended the morning session down
0.4 percent or 40.33 points at 9,692.59.

The broader Topix (.TOPX: ) fell 0.1 percent or 0.69 point to
841.05.

Profit-taking intensified after U.S. shares retreated from a
two-year high on Monday, weighed down by financial stocks and a
stronger dollar.

Still, investors were unwilling to sell too heavily as
underlying sentiment stayed bullish after the Nikkei hit a
three-month intraday high of 9,737.01 the previous day, traders
said.

The Nikkei was expected to find support around 9,650 — near
Tuesday’s low — while a series of technical selling is likely to
block rises around 9,750-9,800, traders said.

The market experienced strong selling pressure when the
Nikkei approached 9,750 the previous day, but a clear break
beyond 9,800 — a peak hit in July — could trigger a series of
stop-loss buying and option-related triggers to pave the way for
it to climb towards 10,000, traders said.

Investors were also hesitant to sell Tokyo shares actively as
the yen remained well below its record high against the dollar.

PRECISION MACHINERY WEIGHED BY EURO

However, the yen’s firmness against the euro weighed on
shares of precision machinery makers (.IPRCS.T: ) like Citizen
(7762.T: ), which have strong business ties in Europe. The subindex
fell 1.5 percent.

The euro fell (Read more about the trembling euro. ) 0.5 percent to around 112.46 yen (EURJPY=R: ),
hurt by rekindling concerns over the euro zone’s debt problems.

“The yen’s strength against the euro is inducing some selling
pressure in precision machinery shares,” said Hiroaki Kuramochi,
chief equity marketing officer at Tokai Tokyo Securities.

Shares of Skymark Airlines (9204.T: ) plunged 15 percent to 802
yen after Japan’s third-largest carrier said it would buy up to
six A380 planes worth as much as $2.1 billion in a deal to become
the first Japanese carrier to purchase the super jumbo jets from
Airbus (EAD.PA: ). [ID:nTOE6A706K]

Skymark’s decision comes as Airbus tackles engine troubles
that led Australia’s Quantas Airways to ground its A380 fleet to
investigate the cause of an explosion that last week damaged a
jumbo engine. [ID:nSGE6A6045]

Dentsu (4324.T: ), Japan’s largest advertising firm, rose 2.1
percent to 2,100 yen after the company raised its operating
profit forecast to 47.5 billion yen from 42.2 billion yen for the
year to March.

Dentsu attributed the outlook hike to cost-cutting and
better-than-expected sales of TV advertising.

Aiful Corp (8515.T: ) surged 32 percent to 66 yen after the
consumer lender said it now expects a first-half profit due to
higher-than-expected interest income and loan recoveries,
lower-than-anticipated bad loan provisions and cost cuts.
[ID:nT84CCA4TE]
(Reporting by Chikafumi Hodo; Editing by Chris Gallagher)

Nikkei dips after rally; faces resistance near 9,750