Nikkei set to rebound on Italy's debt auction, U.S. data

Wed Feb 27, 2013 6:35pm EST

TOKYO, Feb 28 (Reuters) - Japan's Nikkei share average is
expected to rebound from a two-day losing run on Thursday after
a well-bid Italian debt auction eased concerns that an
inconclusive election could reignite the euro zone debt crisis.
    A gauge of planned U.S. business spending recorded its
largest increase in more than a year in January and contracts to
buy previously owned U.S. homes approached a near three-year
high last month, also helping to improve sentiment.
    The Nikkei is likely to trade between 11,350 and
11,550, strategists said, while Nikkei futures in Chicago closed at 11,445 on Wednesday, up 1.6 percent from the
Osaka close of 11,260.
    "Investors' risk-off mode has eased somewhat after ...
Italy's bond auction results were better than expected and in
the U.S. there was good housing data released," said Masayuki
Doshida, senior market analyst at Rakuten Securities.
    "However, I think the upside will likely be capped. The
market may struggle to break the 11,500 level," he said. 
    U.S. stocks advanced overnight, with major indexes posting
their biggest daily gains since early January as data pointed to
economic improvement and Federal Reserve Chairman Ben Bernanke
remained steadfast in supporting the Fed's stimulus policy.
    Bernanke's comments removed a headwind from markets arising
from concerns the Fed might end its quantitative easing earlier
than expected. 
    The Nikkei dropped 1.3 percent to 11,253.97 on Wednesday,
falling for a second straight day as Italy's political turmoil
threatened to derail economic reforms demanded by the markets
and backed by euro zone leaders. The broader Topix index
lost 1.4 percent to 953.72.
    The benchmark Nikkei ended at a 53-month high on Monday,
rallying nearly 35 percent since mid-November as the yen
weakened after Prime Minister Shinzo Abe called for the Bank of
Japan to adopt more aggressive monetary policy in his election
campaign.
                 
> Wall St gains on Bernanke comments, S&P above 1,500       
> Euro advances but gains likely capped by Italy concerns 
> Treasuries slip as equity rally lures investors          
> Gold down 1 pct on U.S. Fed policy and budget cuts      
> Brent falls near month-low under $112                    

    STOCKS TO WATCH
    --SOFTBANK CORP 
    Wireless service provider Clearwire Corp said on
Wednesday it would draw on $80 million in financing from Sprint
Nextel Corp, which is seeking to buy it, but vowed to
continue talks with rival bidder Dish Network Corp.
    Sprint is seeking U.S. regulatory approval for a deal to
sell 70 percent of its own shares to Softbank.
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