Nikkei seen stuck in tight range for fifth session

TOKYO (BestGrowthStock) – Japan’s Nikkei average is expected to be stuck in a tight range for a fifth straight session on Monday as investors lack strong trading incentives and volume edges lower as year-end nears.

The Nikkei stayed flat on Friday after gaining around 0.9 percent last week, with losses in trading companies offsetting gains in banks spurred by foreign buying and hikes in the real estate sector boosted by the Bank of Japan buying scheme.

Market players said the Nikkei has been trapped in a narrow range as domestic investors aggressively took profits on its rally of around 12 percent since the beginning of November, while foreign investors continued buying financial shares seen as undervalued.

Nikkei futures in Chicago closed at 10,350, up 0.6 from the Osaka close of 10,290.

“Tokyo shares are likely to trade in a similar pattern to which they traded last week,” said Hiroichi Nishi, general manager at Nikko Cordial Securities.

The benchmark Nikkei (.N225: ) will likely trade between 10,250 and 10,350, analysts said, after ending virtually unchanged at 10,303.83 last Friday, not far from a seven-month closing high of 10,316.77 hit on Tuesday.

“The dollar/yen rate is steady at around 84 yen, and sentiment is generally strong, but we also have some risk factors to watch out for, such as the situation on the Korean peninsula and the ongoing European troubles,” Nishi said.

A five-notch downgrade of Ireland by Moody’s and budget warnings by the International Monetary Fund on Friday will weigh on market sentiment in the last two weeks of 2010.

The U.N. Security Council held an emergency session on Sunday to discuss tensions on the Korean peninsula, where North Korea’s military has raised an alert for some artillery units ahead of a planned live-fire drill by South Korea.

Investors will also take in a round of U.S. economic data later this week, including the final reading of gross domestic product for the third quarter, new and existing home sales for November, and December consumer sentiment.

Wall St hovers at highs; profit-taking eyed.

Markets still euro-focused; further losses seen.

Buyers step in, recent selloff seen overdone.

Gold firms as Europe debt fears drive safety play.

Oil higher as growth hopes offset euro woes.

STOCKS TO WATCH:

— NTT DoCoMo Inc

The Japanese carrier plans to transfer television broadcast technology for cellular phones to Indian partner Tata Teleservices (TATASL.UL: ) with an eye to launching mobile phone TV service in India in 2014, the Nikkei business daily reported on Saturday.

— Otsuka Holdings.

European regulators have recommended a new drug from Taiho Pharmaceutical, a unit of Otsuka, for approval as a treatment for gastric cancer.

— Fujitsu Ltd.

Fujitsu and Boeing Co (BA.N: ) will create an aircraft parts management system to help airlines cut fleet maintenance costs, Boeing said on Friday.

— Nissan Motor Co Ltd.

The alliance of Avtovaz (AVAZ.MM: ), France’s Renault (RENA.PA: ) and Japan’s Nissan (7201.T: ) is ready to invest up to 7 billion roubles ($228 million) in Russian car maker Izhavto, sources told Reuters on Friday.

— Cosmo Oil Co.

Cosmo said on Friday it had lowered crude input at its 220,000 barrels per day Chiba refinery after a problem with a pipe used to connect with tankers.

(Reporting by Antoni Slodkowski; Editing by Michael Watson)

Nikkei seen stuck in tight range for fifth session