Nikkei likely to trade in narrow range; Toyota eyed

TOKYO (BestGrowthStock) – Japan’s Nikkei stock average is likely to trade in a narrow range on Monday, hurt by worry about fiscal stability in Europe and weak tech shares that pushed U.S. stocks (Read more about the stock market today. ) lower but also bolstered by bargain-hunting.

Toyota Motor Corp (7203.T: ) is likely to be in focus after a U.S. government official said safety regulators are satisfied with a Toyota plan for fixing an accelerator problem that is part of a widening global recall.

Toyota shares traded in the United States (TM.N: ) lost 0.7 percent in active trade on Friday, two days after recording their highest volume since October 2008. The automaker’s stock tumbled nearly 14 percent in Tokyo during the past week on its recall woes.

Uncertainty about the fiscal stability of Greece, Portugal and Spain caused U.S. investors to pull back from early gains on Friday, even as Greek and European Union officials said there was no chance of a Greek default or EU bailout.

As a result, U.S. stocks (Read more about the stock market today. ) dropped on Friday, sending the S&P 500 to its worst monthly decline since February 2009.

“There’s increasing uncertainty about the stability of the global economic recovery, but at the same time world stocks have come down to a level low enough to promote buying,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

“In Tokyo, there’s likely to be some buying of individual shares viewed by investors as being generally solid companies, but overall gains will be limited as investors move to lock in profits at the highs.”

The PHLX Semiconductor Index (.SOXX: ) lost 3.4 percent, weighed down by a soft profit forecast from flash memory maker SanDisk Corp (MSNDK.O: ), but Tokyo market players were unsure how much direct impact this would have on Tokyo shares.

The benchmark Nikkei (.N225: ) is likely to move between 10,100 and 10,300, market players said. It closed at 10,198.04, a six-week low, on Friday.

In a sign the Nikkei may open higher, Nikkei futures traded in Chicago closed at 10,235, up 0.7 percent from the Friday Osaka close.

Wall St falls on euro-zone worry, tech slide (.N: ) > Dollar rallies on stronger-than-expected U.S. data (USD/: ) > Prices gain on stock losses, fiscal worries (US/: ) > Gold falls for third straight week on liquidation (GOL/: ) > Oil falls 1 pct on weak demand, down 8 pct in Jan.

STOCKS TO WATCH

— Toshiba Corp

Toshiba, Japan’s biggest chipmaker, kept its outlook far below market estimates and flagged belt-tightening measures ahead after a stronger yen and sliding PC prices hurt quarterly profit.

For the third quarter, Toshiba, which supplies chips to Apple Inc (Read more about Apple stock future.) and also owns U.S. nuclear firm Westinghouse, earned an operating profit of 10.2 billion yen, up from a loss of 157.7 billion yen a year ago but missing a market consensus of 25.7 billion yen.

— Daiwa Securities Group

Daiwa, Japan’s No. 2 brokerage, reported a smaller-than-expected quarterly profit as losses on trading and property erased part of the gain from the sale of its stake in Sanyo Electric.

Daiwa, which competes with Nomura Holdings (8604.T: ), posted a 26.4 billion yen ($294 million) net profit for October-December, also helped by fees for managing a rush of share offerings by Japanese firms.

— Mizuho Financial Group

Mizuho returned to the black on Friday, helped by a decline in bad loans and smaller losses on its stock portfolio, but analysts said Japan’s No.2 bank has yet to make a convincing recovery.

— Honda Motor Co

Honda said on Friday it would recall a total 646,000 units of the Fit/Jazz and City models globally, including 140,000 in the United States.

— Mitsubishi Heavy Industries

The Japanese government may urge Japan Airlines (9205.T: ) to adopt the Mitsubishi Regional Jet (MRJ) as part of a restructuring of its fleet to more fuel-efficient planes, the Nikkei business daily reported on Monday.

The MRJ project is majority owned by Mitsubishi Heavy Industries and supported by the government.

— Mitsui & Co

Mitsui & Co and a unit of China Electronics Corp (CEC), the two major shareholders of Hong Kong-based TPV Technology Ltd (0903.HK: ), offered to buy the company’s remaining shares for HK$5.20 a share after CEC increased its take above the 30 percent threshold requiring it to make a general offer.

Money

(Reporting by Elaine Lies; Editing by Edwina Gibbs)

Nikkei likely to trade in narrow range; Toyota eyed