Nikkei steady, Fast Retailing falls after weak Oct sales

Reuters

* Fast Retailing hits 2-month low after Uniqlo Oct sales

down Y/Y

* Mitsubishi Motors up on Renault-Nissan cooperation

By Dominic Lau

TOKYO, Nov 6 (Reuters) - Japan's Nikkei average held steady

on Wednesday as a fall in Fast Retailing Co Ltd after

weak October sales offset gains in companies rebounding from a

recent battering on the back of disappointing quarterly

earnings.

The Nikkei was steady at 14,222.12 in mid-morning

trade, breaking below its 50-day moving average of 14,239.73.

Fast Retailing shed 2.5 percent to a two-month low after it

said same-store sales at its Uniqlo causal clothing chain in

Japan fell 13.8 percent last month because of warmer-than-usual

temperatures and typhoons that discouraged shoppers.

It contributed 31 negative points to the Nikkei and was the

fourth-most traded stock on the main board by turnover.

Mobile operator SoftBank Corp, another index

heavyweight, was the most traded stock. It was down 2.5 percent,

giving up some of the 5.6 percent rally in the previous two

sessions on the back of its strong first-half earnings.

But industrial robot maker Fanuc Corp advanced 1.1

percent, on track to snap a five-day losing streak after its

quarterly orders disappointed investors.

Mitsubishi Motors Corp gained 2.2 percent on news

France's Renault and alliance partner Nissan Motor Co

Ltd will deepen cooperation with the carmaker to

develop small cars and sedans.

Nissan added 1.6 percent, recovering from the previous

session's 10.4 percent slump after it cut its annual earnings

guidance, facing a slowdown in emerging markets and quality

issues.

"Earnings reactions for a lot of these shares are quite

volatile. It's not normal to see Nissan down 10 percent, Sony

down 10 percent. They were pretty bad but it's just a bit more

volatile than it used to be," said a senior trader at a European

brokerage in Tokyo.

"Low volume for one. I think since people don't have an

overall directional view on the market. They are kind of making

bigger bet, perhaps, on single stocks rather than on the overall

market, which is causing a bit more volatility," he said, adding

that their sell orders outpaced buy by two-to-one.

Friday's U.S. nonfarm payrolls report will be a key event

for the markets to gauge whether the U.S. Federal Reserve will

scale back its massive stimulus later this year.

TOYOTA EARNINGS

Toyota Motor Corp, the second-most traded, was flat

ahead of its quarterly earnings results after the market close.

The stock has risen 58 percent so far this year, outpacing a 37

percent in the Benchmark Nikkei.

BNP Paribas analysts expected the Nikkei to reach 18,000, or

26.6 percent above Wednesday's level, by June 2014, if the Bank

of Japan offered further easing and reforms in Japanese pension

funds met market expectations, which could increase their equity

allocations.

They recommended investors buying call spread on the Nikkei

expiring in June 2014.

The broader Topix index rose 0.3 percent to

1,186.29, with trading volume at 25 percent of fully daily

average for the past 90 trading days.

With nearly two-third of Nikkei companies reported quarterly

results, 62 percent of them either beat or met market

expectations, data from Thomson Reuters StarMine showed. That

compared with 58 percent in the previous quarter.

Dainippon Screen Manufacturing reported in-line

quarterly earnings, but investors were disappointed that the

precision machinery maker posted a rise in fixed costs,

prompting Goldman Sachs to lower its 12-month price target by 7

percent. The stock lost 6 percent to a two-month low.

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