* Utility shares outperform on Nomura's rating hikes * Nomura expects 26.2 pct rise in large caps' profits * Brokerage stocks fall on profit-taking * Nikkei and Topix in and out of positive territory By Ayai Tomisawa TOKYO, May 14 (Reuters) - The Nikkei share average edged up on Tuesday as gains in utility stocks offset weakness in brokerages while trading remained choppy with investors growing more circumspect over the rapid pace of the latest rally. Traders said that the index may end in negative territory on Tuesday as investors could pocket profits from the recent gains, but losses should be limited by optimism from the weak-yen trend. The Nikkei gained 0.2 percent to 14,817.10 by the midday break, an inch away from a 5-1/2 year high of 14,849.01 tapped on Monday. The index dipped into negative territory earlier, seen as a reflection of natural caution after the market's recent steep gains. The utility sector, was up 9 percent and the best sectoral performer. Kansai Electric Power Co and Kyushu Electric Power Co. gained 17 percent and 12 percent after Nomura Securities hiked their ratings citing the high likelihood of the two resuming nuclear power generation in the medium term. Brokerage stocks lost ground after soaring the previous day on expectations of much higher commission income as trading volume surged. Nomura Holdings fell 1.2 percent and Daiwa Securities dropped 0.9 percent. Struggling audio equipment maker Pioneer Corp jumped 31 percent and was the second-biggest percentage gainer after saying it would form a capital alliance with NTT DoCoMo Inc and increase ties with Mitsubishi Electric Corp to improve its financial base. Exporters were mixed. Toyota Motor Corp shed 0.8 percent, Honda Motor Co dropped 0.6 percent, but Sony Corp rose 1.9 percent. "The market is short of new catalysts for now as most of the corporate earnings are out. Since we have confirmed that companies' conservative earnings forecasts for this year will be revised up, the mid-term trend should be positive," said Nobuhiko Kuramochi, strategist at Mizuho Securities. "Under the current guidance from companies, the Nikkei's resistance level is seen around 15,000." Most exporters based their foreign exchange assumptions at 90-95 yen to the dollar for the year ending March 2014, while the dollar trades around mid-101 levels. The weaker yen lifts exporters' competitiveness abroad and raises profits when repatriated. "The market expects earnings upward revisions in the fall, when prospects for the fiscal year end will be clearer. Then, the Nikkei's levels at 16,200-17,300 will be in sight," Kuramochi said. Nomura Securities expects an average of 26.2 percent rise in operating profit for 188 of 330 Russell Nomura large-cap stocks excluding financials which already reported their full-year earnings. The 188 companies expect an average of 19.6 percent rise in their operating profit for the current business year. The broader Topix gained 0.2 percent to 1,235.08. Since the dollar pierced the 100 yen mark last Thursday, the Nikkei has gained 4.4 percent and is trading about 8.0 percent above its 25-day moving average. "The market is seesawing between worries about the steep rises and hopes for the government's growth strategy," said Yoshiyuki Kondo, an analyst at Daiwa Securities. "It seems like good timing to see a pause in the market." The Nikkei has gained about 43 percent this year, bolstered by expectations for the government's growth policies and aggressive monetary easing by the Japanese central bank.