Nikkei down on China worry; earnings hope a support

* Nikkei edges down, China worry weighs as Shanghai falls

* But Alcoa results, hope for Intel earnings check slide

* Next targets seen around 9,660, 10,250

By Elaine Lies and Aiko Hayashi

TOKYO, July 13 (BestGrowthStock) – Japan’s Nikkei edged lower on
Tuesday, weighed as Shanghai shares fell after China said it had
no plans to relax tougher property measures anytime soon, but
falls were checked by hopes for U.S. earnings later in the day.

Though the market rose in early trade on broad
short-covering as traders took heart from Alcoa’s (AA.N: )
stronger than expected quarterly profit, resistance appeared to
be growing around 9,660, roughly the level of the Nikkei’s
25-day moving average.

China’s key stock index fell nearly 2 percent after the
government said it would continue to rein in speculation in the
country’s red-hot property sector, weighing on shares throughout
Asia. [ID:nTST000264]

“There’s a lot of Chinese economic indicators coming out
later this week, and investors have gotten pretty nervous ahead
of the numbers,” said Takashi Ushio, head of the investment
strategy division at Marusan Securities.

“But Alcoa’s results were quite good and we have Intel later
today, with both of these offering support.”

Intel Corp (INTC.O: ) reports later on Tuesday, and other
companies reporting this week include JPMorgan Chase & Co
(JPM.N: ) and General Electric Co (GE.N: ).

“Although there’s a sense of selling fatigue, investor
sentiment is still bearish, and the market is looking for a
catalyst. Corporate earnings could be one,” said Naoki Koga, a
senior fund manager at Toyota Asset Management.

“Intel’s earnings are a focus because they always illustrate
a trend.”

The benchmark Nikkei (.N225: ) erased morning gains to edge
down 0.1 percent to 9,537.23, while the broader Topix (.TOPX: )
shed 0.4 percent to 854.39.

U.S. stocks (Read more about the stock market today. ) eked out small gains in thin trade on Monday
before Alcoa, the largest U.S. aluminium producer, posted a
stronger-than-expected second-quarter profit (Read more your timing to make a profit.) and raised its
estimate for global aluminium consumption, sending its shares up
3 percent. [ID:nN12206110]

Chairman and Chief Executive Klaus Kleinfeld told Wall
Street analysts that strong industry fundamentals were expected
to drive demand for aluminium in the next 10 years with average
growth of 6 percent a year.

But by afternoon U.S. stock futures (SPc1: ) had given up
earlier gains to edge down 0.2 percent.

The Nikkei’s next upward target is around 9,660, its 25-day
moving average, which is a proxy for a one-month moving average
that is closely watched in Japan. On daily Ichimoku charts, a
popular charting method among Japanese traders, its kijun-sen —
an indicator of medium-term trends — comes in around 9,671,
becoming additional resistance.

The next target after that lies around 10,250, roughly the
level of the Nikkei’s June high.

The technical picture is growing increasingly bright, with
the Nikkei’s MACD, a measure of market momentum, heading up
after a bullish cross.

CHINA BRUISING

Shares with large exposure to China slipped, with Hitachi
Construction (6305.T: ) down 1 percent to 1,717 yen and Komatsu
(6301.T: ), the world’s second-largest maker of earth-moving
equipment, down 1.6 percent to 1,698 yen.

Shanghai copper slipped and London prices extended Monday’s
falls on investor worry on the global economy, with trading
companies taking a hit as a result.

Itochu Corp (8001.T: ) shed 1.7 percent to 704 yen and
Sumitomo Corp (8053.T: ) lost 1.3 percent to 932 yen. Mitsui
O.S.K. Lines (9104.T: ), which rose in morning trade, slipped 1.2
percent to 582 yen.

But a broad range of exporters clung to gains made on
morning short-covering, with Canon Inc (7751.T: ) up 0.3 percent
at 3,460 yen and Tokyo Electron (8035.T: ) up 1.7 percent at 4,910
yen.

Shares of Fast Retailing (9983.T: ), the operator of the
Uniqlo casual-clothing chain, climbed 1 percent to 12,700 yen
after it said it would set up a venture with Bangladeshi
microfinance specialist Grameen Bank. [ID:nTOE66C03N]

Denso Corp (6902.T: ), Japan’s No.1 car parts maker, rose 1.3
percent to 2,658 yen after it announced it would establish an
aftermarket sales company in Dubai in November to strengthen its
business in the Middle East and North Africa.

Trade picked up, with 1.88 billion shares changing hands on
the Tokyo exchange’s first section, the highest in two weeks.
Declining shares outpaced advancing ones by more than 3 to 1.

Nikkei down on China worry; earnings hope a support