Nikkei average edges up

Japan's Nikkei stock average rose 0.2 percent on Monday, buoyed by retailers and other defensive shares, but weighed by banks and companies including Hitachi Ltd that sank on fundraising concerns. Hitachi, Japan's biggest electronics firm by sales, will raise up to $4.6 billion to shore up its capital, joining a scrum of Japanese firms tapping equity markets before a possible economic slowdown.
Data showing Japan's economy expanded at the fastest pace in two years in July-September briefly buoyed shares, but market players said concerns about the future soon trimmed gains. Japan's economy grew 1.2 percent in the third quarter from the previous three months, marking a second straight quarterly expansion, but analysts warn the recovery may lose momentum in coming quarters due to weak domestic demand.
"The GDP figures briefly pushed stocks up just after the open, but it seems that there's still a lack of confidence in Japan's domestic economy, and there are also concerns about supply," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management. "There's a sense that there'll be a slowdown in Japan's economy in the October-December quarter, along with the problem that funds just aren't coming into Japan."
In moderate trade that flipped from positive to negative and back again, the benchmark Nikkei gained 20.87 points to 9,791.18. The broader Topix lost 0.7 percent to 860.42. "The GDP figures were basically good, with consumption having picked up, but this consumption was mainly supported by government stimulus measures and will eventually run out of steam," said Takashi Ushio, head of the investment strategy division at Marusan Securities.
Falls in bank shares weighed on the market after three sources said Mitsubishi UFJ Financial Group would issue about $11 billion in new shares to meet stricter capital requirements and boost lending in Asia. MUFG's common share issue of roughly 1 trillion yen would mark a record for a Japanese financial firm, according to Thomson Reuters data.
"This raises concerns about whether other banks will raise funds and if so, how much," said Marusan's Ushio. "But at least once we get concrete news out there, this can be factored in."
MUFG fell 5.5 percent to 480 yen, while Mizuho Financial Group lost 3.9 percent to 174 yen and No 3 bank Sumitomo Mitsui Financial Group shed 5.9 percent. The banking subindex fell 2.8 percent, becoming the second-biggest loser among the subindexes.
Hitachi sank 8.5 percent to 269 yen and Mitsui Chemicals Inc lost 13.2 percent to 243 yen after the chemicals manufacturer said on Friday it would raise up to $713 million in a public share offering to fund its expansion into the Chinese market. But Nikkei slides were halted by gains in retailers, seen as so-called "defensive shares" that are popular in times of economic turmoil, on a variety of factors.
Marui Group, which operates department stores and credit card operations, rose 6.9 percent to 539 yen after Nomura Securities raised its rating on the company to "neutral" from "reduce", citing a more stable earnings structure. Fast Retailing gained 5.2 percent on the perennial popularity of Uniqlo, its discount clothing chain, while FamilyMart Co edged up 0.4 percent after saying on Friday it would buy smaller rival am/pm.
"There's a lot of different factors operating in the sector, including hopes for reorganisation," said Chibagin's Osakabe. Trade was moderate, with 1.8 billion shares changing hands on the Tokyo exchange's first section compared with last week's daily average of 1.73 percent. Declining shares outnumbered advancing ones by nearly 3 to 1.