Nikkei may edge higher after gains on Wall Street

TOKYO (BestGrowthStock) – Japan’s Nikkei average may rise on Monday after the Dow climbed above 11,000 for the first time in a year-and-a-half supported by wholesale inventories data that brightened prospects for economic growth.

One stock to watch will be Dentsu Inc (4324.T: ). Japan’s biggest advertising agency on Friday raised its operating profit estimate for the year ended in March to 33.9 billion yen ($364 million), up 31 percent from its previous forecast.

“While there are some signs of overheating, the global economy is recovering and there are high hopes for corporate earnings,” said Hiroichi Nishi, general manager in the equity division of Nikko Cordial Securities.

U.S. data released on Friday showed U.S. wholesale inventories rose more than expected in February and sales at wholesalers reached their highest level in 16 months, brightening prospects for first-quarter economic and earnings growth.

Nikkei futures traded in Chicago closed at 11,285.00 on Friday, up 0.7 percent from the Osaka close of 11,210, suggested a higher open for the benchmark Nikkei.

Market players said the Nikkei (.N225: ) was likely to trade between 11,100 and 11,300, after rising 0.3 percent to 11,204.34 on Friday.

The Nikkei hit an 18-month intraday peak of 11,408.17 last week, supported by market expectations for a sharp improvement in corporate earnings in the new financial year that started in April and signs of a strengthening economic recovery in the United States.

While the Nikkei’s trend looks bullish on daily Ichimoku charts, other technical indicators suggest that the market is overbought, with MACD getting close to flashing a sell signal.

The Nikkei is expected to find support at its 25-day moving average that now lies near 10,900.

News that euro zone finance ministers approved a giant 30-billion-euro ($40 billion) emergency aid mechanism for debt-plagued Greece on Sunday may reassure investors and be a supportive factor for equities, market players said.

There have been concerns that worries over Greece’s fiscal woes may curb investor appetite for risk-taking in general. > Wall St climbs with energy sector, Dow touches 11,000 (.N: ) > Greek aid hopes boost euro against dollar Bonds rise on Greece jitters, long-dated bets (US/: ) > Gold hits 2010 high as Greece fear boosts buying (GOL/: ) > Oil drops below $85 on downbeat sentiment.

STOCKS TO WATCH

– Toshiba Corp

Japanese electronics maker Toshiba Corp is set to supply lithium-ion batteries for the electric motorcycles Honda Motor Co Ltd (7267.T: ) plans to launch later this year, the Nikkei business daily said on Sunday. This will be the first time Honda procures batteries from Toshiba, the paper said.

– Toyota Motor Corp

U.S. safety regulators may seek a second penalty against Toyota Motor Corp for knowingly delaying a massive recall over defective accelerator pedals, after imposing a record $16.4 million fine against the automaker.

– Sharp Corp (6753.T: ) and Panasonic Corp

Sharp and Panasonic will begin operating new liquid crystal display (LCD) panel plants at full capacity this summer, accelerating their plans due to strong demand, the Nikkei business daily reported.

Stock Market Research

(Reporting by Masayuki Kitano; Editing by Chris Gallagher)

Nikkei may edge higher after gains on Wall Street