Nikkei down but holds key level; exporters fall

By Elaine Lies

TOKYO (BestGrowthStock) – Japan’s Nikkei average edged down 0.3 percent on Thursday after mixed U.S. economic data showed an uneven recovery and the market took a breather after five days of rises but still managed to cling above the key 10,000 level.

Shares of Fujitsu Ltd (6702.T: ) and Toshiba Corp (6502.T: ) gained after the Nikkei business daily said they had reached a deal to integrate their cell phone businesses, with Fujitsu to take a majority stake in a joint venture to be launched as early as October.

“The market’s recovered to the 10,000 level but it’s lacking energy. Still, there’s a bit more of a willingness to take on risk, which should help keep the downside solid,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

“There seems to be a double bottom forming in a number of global stock markets, but within this general recovery pattern the market may well take a breather today.”

U.S. housing starts fell more than expected in May to a five-month low, casting a shadow over better-than-expected industrial production data for the same month.

Wall Street ended flat on the mixed data and after FedEx Corp (FDX.N: ), deemed an economic bellwether because it serves a wide range of industries, said higher costs would constrain 2011 earnings. Its shares fell, weighing on the wider market.

The benchmark Nikkei (.N225: ) has risen for the past five trading days in its best such streak since six days from November 30 last year. It gained 6.7 percent in the five days.

On Thursday it shed 28.25 points to 10,038.90 after coming within a breath of breaking below 10,000. Staying above 10,000 is important to confirm that the Nikkei has formed a double bottom, analysts say.

“Without foreign investors buying, it’s likely to be difficult to stay above 10,000. There’s not a lot of buying interest around this point today,” said Masayoshi Okamoto, head of dealing at Jujiya Securities.

Support for the Nikkei lies around 9,800, the benchmark’s 25-day moving average, which it closed above on Tuesday for the first time in two months.

Shares of exporters fell after leading gains in the broader market the previous day. A market player said on Wednesday that long positions had accumulated in blue chip shares, leaving them vulnerable should the market’s upward momentum falter.

Sony Corp (6758.T: ) slid 2.1 percent to 2,584 yen and Kyocera Corp (6971.T: ) slipped 1.7 percent to 8,090 yen. Honda Motor Co (7267.T: ) fell 0.7 percent to 2,738 yen.

In contrast, Fujitsu shares were up 0.5 percent at 590 yen and Toshiba jumped 1.2 percent to 489 yen.

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(Editing by Michael Watson)

Nikkei down but holds key level; exporters fall