Nikkei rises as retail buyers snap up small caps, but institutions wary

Sun Jul 13, 2014 10:40pm EDT

* Nikkei rises 0.4 pct, Topix up 0.4 pct
    * Retail investors' buying lift small-to-mid caps
    * BOJ meeting, Yellen testimony and earnings eyed

    By Tomo Uetake
    TOKYO, July 14 (Reuters) - Japan's Nikkei average rose
modestly on Monday, ending its longest losing streak since the
current "Abenomics" rally started in November 2012, as retail
investors picked up shares of small- and medium-sized companies.
    The benchmark Nikkei gained 0.4 percent to 15,221.56
points by the midday break and looked poised to snap a five-day
slide, after euro zone banking jitters faded and lifted Wall
Street shares on Friday.
    But many institutional investors stayed on the sidelines
ahead of a barrage of events this week, leaving domestic retail
traders the main players of the day.
    "We are in the midst of summer, prior to key policy meetings
and speeches, earnings and Chinese data -- all those things
together make for a very low volume, directionless, low
conviction market," said Stefan Worrall, director of equity cash
sales at Credit Suisse in Tokyo. 
    The Bank of Japan will kick off a two-day policy meeting on
Monday. The central bank is widely expected to leave monetary
policy unchanged though it may trim its economic growth
estimates due to soft exports and a slump on consumer spending
after an April 1 sales tax hike. 
    Investors' focus will also be on congressional testimony by
Federal Reserve Chair Janet Yellen, scheduled for Tuesday and
Wednesday, and corporate earnings season, both in the U.S. and
Japan.
    China will release second-quarter GDP data on Wednesday
which investors will scour for signs of whether the economy is
stabilising.
    U.S. stocks and other major global equities edged higher and
the yen stabilised against the dollar on Friday as worries about
Portugal's biggest bank ebbed, while oil prices dropped on
easing concern about supply losses in the Middle East.
  
    "Retail investors were buying small caps," said Yasuo
Sakuma, portfolio manager at Bayview Asset Management.
    While large-cap shares saw limited price moves, the Mothers
index, which comprises smaller growing companies, rose
0.9 percent.
    Shares popular among day traders made hefty gains, with
game-maker Colopl Inc jumping 5 percent, PeptiDream Inc
, a bio-tech company, rising 1.3 percent, and a
Cyberdyne Inc, manufacturer of robot, gaining 2.2
percent, in heavy trade.
    On the main board, index heavyweight SoftBank Corp 
was the most traded stock, climbing 1.6 percent after the Nikkei
business daily said the mobile carrier has reached a basic
agreement to acquire T-Mobile US Inc from German
Deutsche Telekom AG, paving the way for the merger
between T-Mobile and Sprint Corp. 
    Sharp Corp gained 1.3 percent following media
reports that the struggling electronics maker was looking to buy
smartphone panel production facility at its Kameyama plant from
Apple Inc for some 30 billion yen. 
    Tsugami Corp jumped 3.9 percent after the Nikkei
newspaper said the precision machinery maker's operating profit
for the April-June quarter was likely to soar by 380 percent.
    Toho Co Ltd advanced 3.1 percent after Japan's
biggest film distributor announced a robust March-May earnings
thanks to a smash hit of "Frozen". 
    The broader Topix added 0.4 percent to 1,259.73 in
light trade, while the JPX-Nikkei Index 400 rose 0.3
percent to 11,455.48.

 (Editing by Kim Coghill)
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