Nikkei falls to a 4-week closing low, Sharp recovers 12.4 pct

* Some defensives lose ground, some beaten down stocks in
favour
* Investors wary as they await potential moves by c.banks
* Sharp climbs after providing collateral for loans
* Japan Tobacco falls after Russia proposes public smoking
ban

By Dominic Lau
TOKYO, Sept 4 (Reuters) - Japan's Nikkei average index eased
slightly in Tuesday to end at a four-week closing low for the
third session in a row, though the eye-catching move of the day
was the 12.4 percent rebound in shares of embattled TV maker
Sharp Corp.
The turnaround in Sharp came as doubts faded over Hon Hai
Precision Industry's potential investment after its
Chairman Terry Gou said he is demanding a management role in
Sharp as part of an equity tie-up.
Gou's abrupt departure from Japan last week had fuelled an
earlier sell off in Sharp that saw the stock fall 18 percent in
the previous two sessions.
In the overall market, investors were caught between
concerns over slowing economic growth, both in Asia and abroad,
and hopes that central banks would soon act to stimulate their
economies.
"This month is going to be difficult -- there's obviously a
gap between market expectations and central bank intentions, but
it remains to be seen how big the discrepancy is," said Tetsuro
Ii, CEO of Commons Asset Management.
"Domestically the fundamentals are bad, particularly GDP
figures, and the growing signs of trouble in Asian economies
only add to the pressure," he added.
The Nikkei eased 0.1 percent to 8,775.51, falling
for the four straight session but held above its 75-day moving
average at 8,768.48.
September tends to be the weakest month for the Nikkei, with
an average monthly fall of 1.2 percent between 1971 and 2011.
The benchmark is up 3.8 percent this year, underperforming a
11.8 percent rise in the U.S. S&P 500 and a 9 percent
gain in the pan-European FTSEurofirst 300 index.
Among defensives, telecommunications firm Softbank Corp
was the second most actively traded stock, losing 2.4
percent, while the food sector shed 1.4 percent.
Japan Tobacco Inc sagged 4 percent after the
Russian health ministry proposed a law to ban smoking in public
places.
By contrast, some beaten-down stocks found favour. The
shipping sector rose 0.5 percent and the mining
sector gained 0.8 percent.
"Someone out there is having a little bit of a switch out of
the defensive into some of these cyclicals again," a senior
dealer at a foreign bank said.
The broader Topix slipped 0.3 percent to 726.69,
with nearly 1.47 billion shares changing hands, down from
Monday's 1.6 billion but up from last week's average of 1.41
billion.
"It's not likely anyone is going long on riskier stocks,
it's probably just an adjustment period where a bit of bargain
hunting has prompted some investors to cover their shorts," said
Masashi Akutsu, equity strategist at SMBC Nikko Securities.

SHARP, PIONEER RALLY
Aside from renewed confidence that Hon Hai may invest,
Sharp's announcement that it has handed over a 9.2 percent stake
in car navigation maker Pioneer Corp to its main banks
as collateral for fresh loans was also seen as positive.
Short selling in Sharp was high, with 93.78 percent of its
stock that is available to be borrowed out on loan as of Aug.
31, up from a near three-week low of 87.63 percent on Aug. 27,
according to data provider Markit.
Pioneer climbed 4.2 percent on the back of Sharp's
regulatory filing as it removed uncertainty that the struggling
TV maker would offload its stake in Pioneer to raise cash.
Other gainers included DeNA Co Ltd, which rose 2.8
percent after Morgan Stanley MUFG lifted its price target on the
social gaming company and kept its 'overweight' rating.