Nikkei rises and market stabilises, but Fast Retailing caps gains
* Nikkei has shed 3.0 pct for the week * Fast Retailing tumbles on weak domestic sales outlook * Market lifted as the worst over for China shares - traders By Ayai Tomisawa TOKYO, July 10 (Reuters) - The Nikkei share average rose on Friday morning as surging China markets eased worries, but gains were capped by sharp losses in Fast Retailing Co on its weak domestic sales outlook for the current quarter. The Nikkei share average rose 0.4 percent to 19,939.07 points in midmorning trade after opening lower. For the week, the Nikkei has shed 3.0 percent. The broader Topix index outperformed, rising 1.3 percent to 1,599.69. In China, the Shanghai Composite index and the CSI300 index of China's biggest listed companies were both up more than 5 percent at 0212 GMT. Traders say that Tokyo investors will keep focused on Chinese share moves, but for now, they are relieved after Beijing's efforts have halted a rout in Chinese stocks. Given the recent drop, the Japanese market's valuations have become attractive, drawing buying by retail investors and pension funds who usually buy stocks when they are falling, traders added. "Most people think the worst is over," said Isao Kubo, equity strategist at Nissay Asset Management. "Still, the Nikkei's downside is expected around 19,000 if anything happens in China, but I don't think we'll see a further slide below that level for the time being." Meanwhile, the Bank of Japan bought exchange-traded funds worth 32.4 billion yen on Wednesday and the same amount on Thursday. Index-heavyweight Fast Retailing tumbled 6.0 percent and was the second most traded stock by turnover. On Thursday, the company gave a weak outlook for June-August domestic business, which spurred lukewarm views by analysts. Of the 79.39 points the Nikkei gained, Fast Retailing contributed a hefty 132 negative points to the index's losses. While the Nikkei gained 79 points, Fast Retailing pulled the index down 132 points. The company posted an almost 20 percent year-on-year rise in third-quarter operating profit to 39.20 billion yen. "While results were firm, we suspect they did not quite live up to high stock market expectations," Credit Suisse analyst Taketo Yamate wrote in a report. He added that although its third-quarter profits beat the company's internal target, the company left full-year guidance unchanged due to lower same-store sales in June at the domestic Uniqlo business. Exporters rose, with Honda Motor Co and Nissan Motor Co both up 1.0 percent. Financials also were in demand, with Mitsubishi UFJ Financial Group advancing 1.8 percent and Mizuho Financial Group gaining 0.9 percent. The JPX-Nikkei Index 400 gained 1.3 percent to 14,461.25. (Editing by Richard Borsuk)
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