Nikkei set to fall, downgrade threat fans Europe worries
TOKYO (Reuters) - Japan's Nikkei share average is likely to tread lower on Monday, as worries over the euro zone debt crisis heightened after Fitch Ratings warned of possible downgrades for seven European nations last week.
Nikkei futures in Chicago closed at 8,355, down 45 points from the Osaka close of 8,400. Market participants expect the benchmark to trade between 8,300 and 8,400 on Monday, below its 25-day average which is now a resistance point around 8,484.
Orders for Japanese stocks placed through nine foreign securities houses before the start of trade showed net sell orders of 3.5 million shares.
Fitch Ratings warned on Friday it may downgrade France and six other euro zone countries, saying a comprehensive solution to the region's debt crisis was "technically and politically beyond reach."
"Investors will remain cautious of Europe's sovereign debt problems and volume will remain thin on the Tokyo Stock Exchange as foreign investors leave ahead of the Christmas holiday," said Hiroichi Nishi, equity general manager at SMBC Nikko Securities.
Nishi said the Nikkei's fall would be limited as it will likely be supported by the Bank of Japan's buying of exchange-traded funds and bargain-hunting by pension funds.
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(Reporting by Mari Saito)
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