Nikkei seen capped, nuclear worries persist

TOKYO (Reuters) – Japan’s Nikkei average is likely to be capped on Thursday as its rebound from a steep fall last week has run its course and investors are trying to assess the damage from a triple disaster of an earthquake, tsunami and nuclear accident.

With U.S. oil prices near a 2 1/2-year high, shares in trading houses and energy-related companies are likely to gain.

A rise in Wall Street shares is likely to provide some support for Japanese shares, but investors are likely to be cautious about chasing them higher as worries persist about economic disruption from radiation leaks.

“The report that radioactive substances were found in tap water in Tokyo has made people cautious,” said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

“As the public is reacting to the news with relative calm, the market may take it in its stride but it is still susceptible to news like that.”

Buying is seen limited after Tokyo stocks recovered more than 15 percent from their intraday low last week, when Tokyo had posted its biggest two-day decline since October 1987 as radiation leaks from a quake-stricken power plant caused panic among investors.

Nikkei futures last traded in Chicago 65 points above the latest close in Osaka.

The broader Topix index (.TOPX: Quote, Profile, Research) is close to its 200-day moving average at 871, and analysts said that immediate resistance level may prove hard to pierce as the market lacked strong trading cues.

Analysts said the Nikkei would likely trade between 9,350 and 9,500 on Thursday.

(Reporting by Hideyuki Sano; Editing by Edmund Klamann)

Nikkei seen capped, nuclear worries persist