Nikkei flat as profit-taking offsets auto rises

* Nikkei flat but cars and car parts makers gain

* Banks up after MUFG posts good results, Mizuho upgrade

* Trade largely directionless ahead of earnings, indicators

* Panasonic reports smaller loss than expected

By Elaine Lies

TOKYO, Aug 3 (Reuters) - Japan's Nikkei average was flat on Monday after briefly hitting a new 10-month high, with profit-taking after recent sharp gains offsetting rises in auto and tyre makers on hopes the auto sector has seen the worst.

Nissan Motor Co (7201.T) rose 5.4 percent and Bridgestone Corp (5108.T), the world's largest tyre maker, gained 5.2 percent. Denso Corp (6902.T), a car parts maker, climbed 4.5 percent.

Banks rose after Mitsubishi UFJ Financial Group (8306.T) posted its first profit in three quarters, while a brokerage upgrade helped Mizuho Financial Group (8411.T) jump 6 percent.

But profit-taking emerged as the Nikkei took a breather following recent gains that sent it to a 10-month closing high on Friday and saw it rise 4.1 percent for the whole of last week.

It also booked its fifth straight months of gains in July, its longest such run since 2005.

"There's not a lot of direction, with U.S. shares firm but pausing for now, and the Nikkei seeing a little profit-taking after climbing so fast," said Noritsugu Hirakawa, a strategist at Okasan Securities.

"It won't fall much since results have been largely good, but to rise now we need something positive on the macroeconomic front, like good indicators, and people are waiting for U.S. employment data on Friday."

In choppy trade, the benchmark Nikkei .N225 lost 4.36 points to end at 10,352.47, though it briefly rose as far as 10,380.57 in morning trade -- its highest point since early October.

The broader Topix gained 0.8 percent to 957.56.

Panasonic Corp (6752.T) reported a smaller-than-expected quarterly loss as it cut costs to fight a firmer yen and weak TV and digital camera demand, and it stuck to its annual outlook for net loss to shrink by half. [ID:nT167959]

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