Nikkei vulnerable to profit-taking, may edge down

TOKYO (BestGrowthStock) – Japan’s Nikkei average may edge lower on Monday, hit by profit-taking after ending the previous week at an 18-month high, though a slight yen weakness against the euro could support exporters such as Canon Inc.

Panasonic Corp (6752.T: ) may draw investor attention after Kyodo news reported on Sunday that it is expected to start mass-producing liquid crystal display (LCD) panels in early April at a new plant in Japan three months ahead of schedule, citing industry sources.

The Nikkei’s Friday rise, which at one point briefly took it over 11,000, plus the fact that Friday was the last day for investors to buy many Japanese stocks and still get dividends on them for the business year that ends this month, mean the benchmark may be vulnerable to dips, market players said.

They added that the so-called ex-dividend impact was likely to take around 70 points off the average.

“If the Nikkei can manage to overcome this during the day today, things look good for the short-term,” said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

“Overall, with the global economy improving and world stock markets rising, investors are turning more positive on Japan and rising decisively above 11,000 is just a matter of time.”

Other market players said that expectations for the coming business year and Japanese results season were likely to keep the Nikkei solidly supported even if it should lose ground due to profit-taking on Monday.

The euro’s broad strengthening on Friday after euro zone leaders agreed on a financial safety net for Greece was also likely to lend support, though the euro had edged down against the yen in early trade.

The benchmark Nikkei (.N225: ) is likely to move between 10,800 to 11,000, market players said. It closed at 10,996.37 on Friday.

Nikkei futures traded in Chicago closed at 10,955, slightly higher than the Osaka close of 10,930.

Wall St flat on Korea nerves, Oracle hurts Nasdaq (.N: ) > Euro gains on Greece safety net accord (USD/: ) > Prices edge higher after rough week (US/: ) > Gold rises on euro rally, Greece; currencies eyed (GOL/: ) > Oil falls to $80 as U.S. revises GDP.

STOCKS TO WATCH

— Nisshinbo Holdings Inc

Nisshinbo Holdings, a top cotton spinner, said on Friday it would retire 5.3 million of its own shares, which amount to roughly 2.9 percent of its outstanding shares, on April 22.

— Sumitomo Mitsui Financial Group

Nikko Cordial Securities, a unit of Sumitomo Mitsui Financial Group, said it would increase its workforce by 14 percent to 8,000 in three years as it chases larger rivals such as Nomura Holdings.

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(Reporting by Elaine Lies; Editing by Joseph Radford)

Nikkei vulnerable to profit-taking, may edge down