October 14, 2012 / 11:31 PM / 5 years ago

Nikkei seen firmer as investors go bargain hunting

TOKYO, Oct 15 (Reuters) - Japan's Nikkei share average is
expected to edge early higher on Monday as investors pick up
battered stocks hit by concerns over poor earnings, although
investors will be watching Chinese data later in the day for
cues.
    Market players said the Nikkei was likely to trade between
8,450 to 8,600, possibly breaking below the psychologically key
8,500 level if China's consumer price index and producer price
index figures disappoint.
    Nikkei futures in Chicago closed at 8,545 on
Friday, down 0.2 percent from the close in Osaka, while
U.S. stocks also suffered their worst week in four months, hit
on Friday by disappointing results from financials such as Wells
Fargo and JPMorgan Chase & Co..
    The Nikkei dropped for a fifth straight session on Friday to
a two-month low of 8,534.12, marking its biggest weekly fall
since May as investors fret over profit warnings and below par
results as the earning season gets into gear.
    "After a big drop last week stocks are starting to look
cheap," said Masayuki Doshida, senior market analyst at Rakuten
Securities. "I think we'll see a pretty steady market today as
it's difficult to make big moves and people have sold off a lot
in anticipation of earnings that haven't come out yet."
    Concern about the impact of a global slowdown corporate
profits has weighed heavily on Japanese equities over the past
month, while the the market has also been hurt by a diplomatic
spat that led Japanese exports to China to fall 9.6 percent in
September on a year earlier.
    That has left stocks looking cheap, with stocks on the first
section of the Tokyo Stock Exchange t rading below book value on
average with a pr ice-to-book ratio of 0. 9, a ccording to Thomson
Reuters Starmine.
    
> Wall St posts worst week since June, banks weigh        
> Commodity currencies firmer, more China data on tap     
> Prices rise on muted inflation; Spain eyed              
> Gold falls, US data feeds worry Fed could curb stimulus 
> Brent falls $1/bbl, spread to U.S. crude narrows        
    STOCKS TO WATCH
    -HINO MOTORS LTD 
    Truck maker Hino is to spend a combined 11 billion yen to
increase output in Malaysia, linking up with local automobile
firm MBM Resources Berhad, and will start assembling engines in
Indonesia from the first half of 2014, according to the Nikkei
business daily.
    
   -KOMATSU LTD 
    Komatsu's operating profit for the April-September half
likely fell 17 percent on the previous year to 111 billion yen
($1.42 billion) after Chinese sales slowed, the Nikkei business
daily reported.

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