Nikkei hits 2-wk high as energy firms shine; Showa Shell soars on M&A report
* Nikkei flat, Topix up 0.1 pct * Oil-related shares jump on merger news, rebounding oil prices * Trade thin as holiday period beckons * Nikkei may test new highs toward year-end - traders By Tomo Uetake TOKYO, Dec 22 (Reuters) - Japanese stocks briefly hit a two-week high on Monday morning, led by oil-related shares on rebounding crude prices and as Showa Shell Sekiyu surged over 25 percent on a media report of an impending takeover bid. The benchmark Nikkei share average rose as high as 17,692.58, the best level since December 9, before erasing gains to stand at 17,621.66 by the midday break, almost flat from Friday close. Oil-related shares led the rally, with the oil and coal products companies subindex jumping 7.7 percent to become the best performing sector on the main board. U.S. crude futures rose to near $57.50 a barrel in early Asian trades on Monday, extending a rise helped by profit-taking on short positions. Oil refiner Showa Shell Sekiyu was the highlight of the session, surging 25.6 percent after media reported the oil refiner was in talks to be acquired by a larger rival, Idemitsu Kosan Co Ltd, for up to 500 billion yen ($4.2 billion) in a deal that could create Japan's second largest player in the domestic gasoline market. "Hopes are high for industry restructuring and this provides broad support for related stocks," said Yasuo Sakuma, portfolio manager at Bayview Asset Management. Showa Shell was the fifth-heaviest traded stocks by turnover on the Topix. Idemitsu Kosan gained 4.8 percent. JX Holdings Inc, the industry leader, gained 6.2 percent and Cosmo Oil Co Ltd soared 16.6 percent. Japan's top oil and gas explorer Inpex Corp gained 3.5 percent after oil prices bounced back from multi-year lows. Some profit taking weighed on the market as the Nikkei gained more than 800 point, or nearly 5 percent, in the previous three sessions. Trading was slower than usual as many offshore players were on holidays ahead of Christmas, leaving domestic traders as the main players. Japanese markets will be closed on Tuesday for a public holiday. The broader Topix added 0.1 percent, while the new JPX-Nikkei Index 400 also rose 0.1 percent. Some traders called on domestic investors to play a more active role in Japan's stock market. Foreign players account for about 70 percent of market volume. "Japanese stock markets depends too heavily on foreign investors. We need Mrs. Watanabe to buy Japanese equities in order to push the markets on to the next level in 2015," said Kathy Matsui, chief Japan strategist at Goldman Sachs. ($1 = 119.5500 yen) (Editing by Shri Navaratnam)
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