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Nikkei seen firmer on trust buying

TOKYO: Tokyo stocks are expected to firm slightly this week, possibly regaining the psychologically key 20,000-point level with the help of new equity-oriented investment trusts.

Although the market is still likely to rely on New York for direction, traders said strong demand for key high-tech issues set to be incorporated into the new trusts would support key indices.

The market's benchmark Nikkei average is expected to trade in a range of 19,400 to 20,200. It ended last week at 19,817.88, up 0.15 percent on the week.

"The market is expecting new investment trusts to direct more money into the equities market," said Masaru Yamano, equities general manager at Taiheiyo Securities. "Buying by those trusts will probably keep the Nikkei supported this week as well."

Six new investment trusts focusing on Japanese equities were launched last Friday, collecting a combined 188.58 billion yen in initial subscriptions.

Such funds are seen investing in a wide range of stocks, picking up industry laggards as well as high-flying Internet shares.

Dealers said buying would concentrate in core information technology stocks such as telecoms giant Nippon Telegraph and Telephone (NTT) Corp, its mobile phone unit NTT Docomo, and Sony Corp

NTT Docomo ended on a strong note last Friday at 4.23 million yen, up nearly 10 percent on the week, helped by news that Goldman Sachs reiterated its "buy" recommendation on Docomo, keeping its price target at 4.34 million yen.

The report said subscriptions for Docomo's i-mode service have been increasing as forecast.

Sony shares rose to 30,850 by the end of last week, up four percent on the week, helped by expectations ahead of the launch of its new PlayStation2 videogame console on March 4.

Sony Computer Entertainment, a Sony unit, has said it aims to sell one million units of PlayStation2 in the first two days after its launch. It is priced at 39,800 yen.

Market players also said selling related to the unwinding of cross-held shares should ease this week. Institutional investors tend to sell banking and domestic-demand led shares from mid- February to March in an effort to boost their yearly performance, assessed at end-March.

"So far we've seen twice the normal amount of pre-March selling by institutions trying to unload cross-held shares," said a trader at a local brokerage. "But such moves seem to be winding down.banks and many cheaper shares seem to be recovering."

But gains are seen slightly limited as traders remain cautious of interest-rate related mood-swings on Wall Street.

The Nasdaq composite index ended Friday down 0.59 percent at 4,590.50.

The Dow Jones industrial average lost 2.28 percent to 9,862.12.

Traders said, last Friday the market was so far showing little concern over the possibility of leap-year related glitches in computer systems on Tuesday, February 29.-Reuters