Nikkei set to open lower as Greek debt worries weigh

TOKYO: The Nikkei stock average is set to open lower on Monday, as euro zone debt worries continue to weigh on markets before a crucial parliamentary vote due this week and after a sharp fall in overseas banking shares.

Market participants will look closely whether Greece can avoid becoming the first euro zone country to default on its debt as it votes on a package of harsh austerity measures due on Wednesday and Thursday. ??? Banking shares will be in focus after a steep fall in shares of two Italian banks on fears about their capital positions reminded investors about contagion risks.

"The Nikkei will probably drift a bit lower, but I don't expect a sell-off," said Mitsuo Shimizu, deputy general manager at Cosmo Securities.

"We'll be closely looking at banks, but also at shares of car and car parts makers which may be the key to the Nikkei's moves after they advanced so much last week on receding supply chain worries,"

The KBW Banks Index fell 1 percent and the S&P Financial Sector Index lost 0.7 percent.

Nikkei futures traded in Chicago closed at 9,610, 60 points below the last closing level in Osaka.

Analysts say the Nikkei will likely trade between 9,500 and 9,650.

STOCKS TO WATCH

-- Nissan Motor Co

Nissan expects its Mexican production to rise 20 percent this year from 2010 in what may be a record year for the Japanese automaker in the country.

-- Hitachi Ltd

General Electric -Hitachi's nuclear venture said the US Nuclear Regulatory Commission (NRC) completed its 75-day public comment period on the company's application for final design certification of its Economic Simplified Boiling Water Reactor (ESBWR).

-- Takashimaya

Japanese department store operator Takashimaya said operating profit in the three months to May 31 fell 12.5 percent as customers dwindled in the wake of Japan's earthquake, but it raised its outlook for its first half saying business had bounced back.

Copyright Reuters, 2011