Nikkei flat ahead of China data; still set for weekly gain

Thu Oct 17, 2013 9:53pm EDT

* Nikkei flat, Topix up 0.1 pct
    * Investors' focus shifts from politics to earnings

    By Tomo Uetake
    TOKYO, Oct 18 (Reuters) - Japan's Nikkei stock average was
little changed on Friday as investors awaited key Chinese data
due later in the morning and as they pondered the impact of the
U.S. government shutdown on the world's largest economy.
    The Nikkei was almost flat at 14,588.65, not far
from a three-week high of 14,664.22 hit the previous day. The
benchmark rose on Thursday for the seventh straight day, its
longest such run in 7-1/2 months.
    On the week, the Nikkei was up 1.3 percent and on track for
a second consecutive week of gains.
    Democrats and Republicans in Washington reached an 11th-hour
agreement to break an impasse over the debt ceiling, pulling the
U.S. economy from the brink of an historic default as the deal
funds the government until Jan. 15 and raises the borrowing
limit through to Feb. 7.
    "It's still too early to tell what lasting impact that might
have on sentiment," Stefan Worrall, director of equity cash
sales at Credit Suisse in Tokyo, said of the U.S. debt ceiling
debacle. 
    "There is no question that the shutdown in the U.S. will
have an impact on data, but how much and how long will that be?
Because people can't categorically make that judgement ... it
will keep the assessment of macro fundamentals difficult."
    Now that a last-minute budget deal has been reached in
Washington, investors are focusing on the upcoming corporate
earnings season, which gets into gear next week, Worrall added.
    Analysts said many Japanese companies were expected to post
upbeat earnings or raise their annual earnings projections.
    "With interim earnings announcements getting underway, we
anticipate favorable results overall and upward revisions to
full-year guidance," Goldman Sachs wrote in a note to clients
last week.
    Traders are also looking for leads from a batch of Chinese
economic data, which should shed light on the economic health of
the world's second-largest economy. Beijing is due to release
third-quarter GDP growth, September data for industrial output
and others at 0200 GMT.    
    The broader Topix added 0.1 percent to 1,207.33 in
relatively light trade, with volume at 28.5 percent of its full
daily average for the past 90 trading days.
    Olympus Corp rose 1.6 percent after the Nikkei
business daily said the company was likely to log a group
operating profit of around 30 billion yen ($306.86 million)for
the April-September half, up about 70 percent on the year.
    Real estate stocks were also in demand. The sector subindex
 gained 1.7 percent to become the best performer on
Topix.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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