* Machinery firms up on short-covering despite weak machinery data
* Daikin soars on report citing strong overseas business
* China markets in focus as they resume trade after long break - traders
By Ayai Tomisawa
TOKYO, Oct 8 (Reuters) - Japanese stocks were flat in a choppy morning session on Thursday, stalling after six straight days of gains, as weak machinery orders data stoked uncertainty about the economic outlook.
After opening weaker, the Nikkei moved in and out of the black and was flat at 18,319.71 in mid-morning trade.
Japan's core machinery orders unexpectedly fell 5.7 percent in August from the previous month, which could cast doubt on the strength of capital expenditure.
"The bleak machinery data is weighing on sentiment, but at the same time, the market expects economic stimulus measures from the government," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Investors were also cautiously watching how Chinese stocks perform after trading resumed there following a week-long break.
As of 0135 GMT, the Shanghai SE Composite Index was up 3.1 percent.
Surprisingly, despite the weak machinery data, machinery stocks bounced from a battering recently. Okuma Corp rose 6.5 percent and Minebea Co gained 6.0 percent, but still down 8 percent and 7.8 percent this year, respectively.
Exporters were also strong, with Toyota Motor Corp rising 0.9 percent and Honda Motor Co gaining 1.0 percent.
Air-conditioner maker Daikin Industries Ltd rose 3.8 percent after the Nikkei business daily reported that its overseas operations are picking up, with its Chinese business benefiting from brisk summer sales of commercial units for residential buildings. The stock was the third biggest positive contributor to the Nikkei, adding a hefty 11 points to the benchmark.
Hino Motors Ltd fell 2.4 percent after Credit Suisse lowered its rating to 'neutral' from 'outperform', citing weak demand in emerging markets and unfavourable exchange rates.
The broader Topix gained 0.2 percent to 1,496.03 and the JPX-Nikkei Index 400 added 0.2 percent to 13,405.00. (Editing by Shri Navaratnam)