Nikkei inches up 0.1 pct, Nikko Cordial bought

(Updates to midsession)

By Taiga Uranaka

TOKYO, Oct 3 (Reuters) - Japan's Nikkei average inched up 0.1 percent on Wednesday, with Nikko Cordial Corp 8603.T and rival brokerage houses bought following Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) announcement it will buy out minority shareholders in Nikko Cordial.

At the same time, heavy selling on Fast Retailing Co Ltd (9983.T: Quote, Profile, Research, Stock Buzz) and profit-taking put a lid on any upward move.

"There is profit-taking at 17,000. But at the same time, selling is likely to be limited because investors are also aware of selling risks in an upward trend in global markets," said Kenichi Hirano, operating officer at Tachibana Securities.

He said companies with strong fundamentals such as digital camera and precision instrument maker Nikon Corp (7731.T: Quote, Profile, Research, Stock Buzz) were gaining even in the face of profit-taking. Nikon rose 2.5 percent to 4,150 yen, an intraday high since May 2000.

While there is growing optimism amid an upward trend in the global market, Takahiko Murai, general manager of Nozomi Securities, said the Japanese equities market is likely to remain a laggard.

"For foreign investors, there is little compelling reason to invest in the Japanese market when other Asian markets are emerging strong," he said.

The benchmark Nikkei .N225 ended the morning session up 8.71 points at 17,055.49.