Tokyo shares flat by noon

TOKYO: Tokyo shares were flat on Tuesday morning amid pressure from a firm yen and an overnight fall in New York shares.

The benchmark Nikkei index gained 2.97 points or 0.03 percent to 9,383.32 by the break after losing 1.18 percent to end on an 11-week low the previous day.

The Topix index of all first-section issues gained 0.10 percent or 0.81 points to 808.80.

"The market energy still seems to be somewhat downward-biased on the back of weak global economic fundamentals," Hisatsune Kobayashi, general manager at SMBC Nikko Securities, told Dow Jones Newswires.

But he said selling was capped by a rebound in Tokyo Electric Power (TEPCO) on expectations that the utility would avoid bankruptcy.

"Chief government spokesman Yukio Edano said the government is trying to avoid court-backed bankruptcy proceedings for TEPCO so the remarks should help to calm the broader market sentiment as well," said Kazuhiro Takahashi, general manager at Daiwa Securities.

Edano said after the market close Monday that TEPCO should avoid going through bankruptcy proceedings to ensure compensation to people affected by its crippled Fukushima nuclear power plant.

TEPCO shares, which dived nearly 28 percent on Monday amid fears of a massive loss for the year to March 2012 and of delisting from the stock market, rebounded sharply.

They ended the morning up 6.76 percent at 221 yen.

Toshiba rose 1.51 percent to 403 yen after a media report that it and Sony would merge their small LCD panel businesses.

Sony, which lost more than three percent to close at the lowest level since March 2009 on Monday, fell a further 2.13 percent to 2,018 yen.

Falling bank shares dragged US stock markets down for the fourth straight trading day Monday, with worries their margins would be under pressure from the slow economy.

The Dow Jones Industrial Average closed 61.30 points, or 0.50 percent, lower at 12,089.96.

Copyright AFP (Agence France-Presse), 2011