* Nikkei gains 0.7 pct, after 1 pct fall the previous day
* Domestic demand stocks such as KDDI provide support
* Banks fall on fears about bankruptcy by U.S. automakers
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Dec 5 (Reuters) - The Nikkei average gained 0.7
percent on Friday, helped by shares of firms reliant on domestic
demand, though bank stocks slid on fears about the potential
fallout if big U.S. automakers file for bankruptcy.
Chugai Pharmaceutical Co <4519.T> tumbled nearly 10 percent
after U.S. regulators asked for more data in their review of key
rheumatoid arthritis drug Actemra, being developed by Chugai's
partner Roche Holding AG <ROG.VX>. []
The benchmark index shifted in and out of a negative
territory, with moves exaggerated by light trade, market analysts
said, adding that investors bought stocks as the Japanese market
had priced in the overnight fall on Wall Street the previous day.
"It's a process of elimination. Domestic demand reliant
stocks or defensive stocks are all that's left and this situation
hasn't changed," said Yoshinori Nagano, chief strategist at Daiwa
Asset Management.
The benchmark Nikkei <> added 53.53 points to 7,977.77,
while the broader Topix <> rose 0.4 percent to 791.90.
Market analysts said all eyes were on the fate of the U.S.
Big Three automakers.
"Concerns have spread that financial institutions including
Japanese ones wouldn't be able escape unscathed if big U.S.
automakers were to go bankrupt," said Tsuyoshi Segawa, an equity
strategist at Shinko Securities.
"We have no idea where and what could happen if a huge
corporation like them failed."
The chief executives of General Motors Corp <GM.N> and
Chrysler LLC said they would consider restarting talks about a
merger during a nearly six-hour congressional grilling on the
industry's pleas for $34 billion in government aid.
No resolution of the auto aid issue is expected until next
week at the earliest, when full Congress reconvenes.
[]
Investors were also cautious ahead of Friday's announcement
of U.S. jobs data.
DEFENSIVE STOCKS SUPPORT, BANKS DOWN
So-called defensive shares such as phone operator KDDI Corp
<9433.T> and Kao Corp <4452.T>, Japan's biggest household
products maker, came in favour amid the global economic downturn.
KDDI gained 3.4 percent to 642,000 yen to become the biggest
positive contributor to the Nikkei 225, while Kao climbed 1.4
percent to 2,830 yen.
Bank shares fell, with Japan's top lender Mitsubishi UFJ
Financial Group <8306.T> down 5 percent at 437 yen and No.2
Mizuho Financial Group <8411.T> losing 4.9 percent to 214,800
yen.
Chugai sank 9.6 percent to 1,448 yen to become the top drag
on the Nikkei 225.
Shares of Orix Corp <8591.T> were down 0.2 percent at 4,470
yen after the Japanese leasing and financial services firm said
it has asked Japan's securities regulator to investigate
"untruthful information" that was circulating about the company
and affecting its share price. []
Trade was moderate on the Tokyo exchange's first section,
with 847 million shares changing hands, compared with last week's
morning average of 779 million.
Advancing shares outpaced declining ones, 869 to 670.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
