Nikkei hurt by weak China shares; volume at 2-yr low

* Nikkei down 0.6 pct on yen, falls in Chinese shares

* Sentiment still bullish, helped by charts, output data

* Turnover slips to 1.08 bln shares — lowest since 2008

By Chikafumi Hodo

TOKYO, Dec 28 (BestGrowthStock) – Japan’s Nikkei average slipped 0.6
percent on Tuesday as falls in Chinese shares and a slightly
firmer yen prompted light profit-taking, but it was supported by
strong Japanese output data and healthy technical signals.

The Nikkei (.N225: ) was rangebound in thin year-end trading as
investors were less enthusiastic about taking more buy positions
after a 0.8 percent gain the previous day.

“The Nikkei was capped by falls in Shanghai shares and a
slight recovery of the yen. The Nikkei could have risen if
Chinese shares gained today as market sentiment is still
bullish,” said Toshiyuki Kanayama, a market analyst at Monex Inc.

“We’ve seen funds flowing into small-cap shares today, but
the market simply didn’t have enough energy to rise as there
weren’t enough active players.”

The benchmark Nikkei (.N225: ) finished the day down 63.36
points at 10,292.63.

The broader Topix index (.TOPX: ) fell 0.2 percent or 1.85
points to 902.83.

Daily trading volume fell to the lowest since December 2008,
with 1.08 billion shares changing hands on the Tokyo Stock
Exchange’s first section.

Turnover in value terms fell to 719.2 billion yen ($8.69
billion) — the lowest since Jan. 4.

Hong Kong shares (.HSI: ) fell 1.1 percent as the market
resumed trading from a holiday the previous day and absorbed the
weekend credit-tightening by China’s central bank.

Shanghai shares (.SSEC: ) fell 1.3 percent by late afternoon,
extending falls after slipping 1.9 percent on Monday.

The Nikkei was also pressured as the yen firmed about 0.5
percent against the dollar to 82.44 (JPY=: ) by late Asian trade,
but the market was careful about selling the Nikkei too strongly
as the underlying trend remained bullish.

UPBEAT DATA

Tokyo participants were looking for chances to test the
Nikkei above last year’s close of 10,546.44 by this year’s final
trading day on Thursday, analysts said.

Bullish technical signals and positive Japanese output data
released on Tuesday also provided bargain-hunting opportunities,
they said.

Industrial output rose 1.0 percent in November, marking the
first rise in six months, in a sign companies are increasing
production on expectations for a pickup in global demand early
next year. [JPIP1=ECI]

“The market has so far shown little reaction to the
industrial output figures, but this is clearly positive for the
outlook,” said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ
Morgan Stanley Securities.

“More positive data, which would signal an improvement in
shipments and falls in inventories, could provide support to the
electronics and machinery sectors,” Yamagishi said.

Manufacturers surveyed by the Ministry of Economy, Trade and
Industry expect industrial output to rise 3.4 percent in December
and 3.7 percent in January, the data showed.

Shares of Anges MG (4563.T: ) surged 8.7 percent to 122,700 yen
after it and Shionogi & Co (4507.T: ) announced they had agreed to
work together on research and development for a treatment for
atopic dermatitis and other skin disorders.

Shionogi fell 0.1 percent to 1,609 yen.

Mizuho Financial Group (8411.T: ) rose 1.3 percent to 155 yen
after its chief executive told Reuters the bank can meet
additional capital requirements without raising funds if it
becomes subject to stricter global rules under consideration for
banks deemed “too big too fail.” [ID:nTWKRNE670]

Dai-ichi Life Insurance Co (8750.T: ) rose 2.1 percent to
133,600 yen. Japan’s second-largest life insurer said after the
close that it plans to buy all the shares it does not already own
in midsize life insurer Tower Australia Group Ltd (TAL.AX: ) for
99.6 billion yen ($1.2 billion). [ID:nTFD006611]
($1=82.78 yen)
(Reporting by Chikafumi Hodo; Editing by Chris Gallagher)

Nikkei hurt by weak China shares; volume at 2-yr low