Nikkei flat in choppy trade; ex-factor drags

Tue Mar 26, 2013 11:09pm EDT

* Ex-dividend effect shaves off about 90 points from Nikkei
- traders
    * Aeon rises on tender offer to become top shareholder of
Daiei
    * Japan market is in "structural bull market" - JPMorgan

    By Ayai Tomisawa
    TOKYO, March 27 (Reuters) - Japan's Nikkei average was flat
on Wednesday morning in directionless trade after many shares
went ex-dividend, offsetting the boost to sentiment from Wall
Street's data-led gains.
    Traders said the effect of shares going ex-dividend -
Tuesday was the deadline for investors to buy shares and be
eligible to receive dividends for the current financial year -
took about 90 points off the Nikkei and about 9 points off the
Topix.
    The Nikkei was flat at 12,476.65 by the midday break after
venturing into both positive and negative territory. The index
is 1.4 percent below a 4-1/2 year high of 12,650.26 struck last
Thursday.
    Analysts said that investor sentiment remained positive on
expectations of expansionary policy measures emerging from the
Bank Of Japan's policy meeting on April-3-4 under its new
leadership, but that trading may stay choppy on Wednesday.
    "If you take ex-dividend price declines into account,
overall gains will likely be limited at the end of the day,"
said Toshihiko Matsuno, a senior strategist at SMBC Friend
Securities. He added that the market remained nervous about the
euro zone's debt problems because of the negative implications
for future bailouts in the current rescue plan for Cyprus.
    "In terms of global market news, there is a mix of both
positives and negatives, so most investors may stay on the
sidelines for now," Matsuno said.
    The Dow Jones industrial average on Tuesday climbed
to another record close and the S&P 500 came within striking
distance of its all-time closing high, as strong data on home
prices and manufacturing fed optimism about the economy.
    The broader Topix was also flat at 1,044.31.
    On Wednesday, Aeon Co rose 4.7 percent after
sources told Reuters that the company would raise its stake in
Daiei Inc to more than 40 percent through a tender
offer to become the supermarket operator's top shareholder after
acquiring 24 percent from Marubeni Corp.
    Daiei dropped 11 percent.
    Real estate companies gained on hopes for the government's
reflationary policy, with Mitsui Fudosan rising 3.4
percent and Mitsubishi Estate adding 2.4 percent.
    Exporters were mixed, with Toyota Motor Corp adding
0.2 percent, Sony Corp rising 0.7 percent while Nikon
Corp dropping 0.9 percent.
    "If the dollar trades above 95 yen, we may even see the
index climb back to near a recent high quickly on exporters'
gains," said Naoki Fujiwara, a fund manager at Shinkin Asset
Management.
    The dollar last traded at 94.74 yen.
    
    COMPANIES' FORECASTS IN SIGHT
    The benchmark Nikkei has rallied about 44 percent since
mid-November, when Prime Minister Shinzo Abe started calling for
bold monetary easing and expansionary fiscal policy to revive
the economy.
    Analysts said that gains seem to have paused for the time
being before the end of the fiscal year, but long-term sentiment
on the Japanese market remains bullish.
    "We think Japanese equities are poised to stay in a
structural bull market. While a 'pause for breath' is long
overdue, the fundamental case remains strong, with rising
visibility of earnings set to pull the market higher over the
coming nine to 12 months, in our view," Jesper Koll, head of
Japanese Equity Research at JPMorgan wrote in a report.
    "Micro factors rather than macro ones look set to become the
key catalyst for the next up-leg in the market."
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