* Nikkei down 0.8 pct, falls for third day on Libya unrest
* Tobu Railway tumbles on equity financing plans
By Antoni Slodkowski and Ayai Tomisawa
TOKYO, Feb 24 (Reuters) - Japan's Nikkei average slipped to a
three-week low as it lost ground for a third straight day on
Thursday, as violence in Libya prompted a spike in oil prices
while capital raising announcements also weighed on sentiment.
The Nikkei fell below closely-watched technical support at
its 25-day moving average of 10,548 and investors will be
watching whether it can hold above 10,500 at the close, analysts
said.
Tokyo stocks have climbed some 3 percent this year and 14.5
percent since November, and players said that despite current
weakness, the market could still be on a rising trend
longer-term.
"Investors knew all long that a correction was on its way
after the rally, and the turmoil in Libya gave the market a good
opportunity to enter one," said Makoto Kikuchi, CEO at Myojo
Asset Management Japan.
"It may be a pretty deep one, and barring any further moves
in exchange rates and sharp hikes in oil prices, the market will
likely move between 9,800 and 10,500 until it starts rising again
in mid-March."
Kikuchi added that these levels, representing a roughly 5 to
10 percent retracement from the benchmark's year-to-date high of
10,857.53, would be typical for a healthy correction and any
decisive moves below them would mean the long-term upward trend
has changed.
By mid-afternoon, the benchmark Nikkei <> had fallen 0.8
percent to 10,500.24 after hitting an intraday low of 10,474.78.
The broader Topix <> dropped 0.8 percent to 939.59.
The spread of unrest from Egypt to Libya and the jump in oil
prices to around $100 per barrel has helped pull the Nikkei off
nine-month highs hit on Monday. Worries about further contagion
to bigger oil exporters such as Saudi Arabia, were expected to
keep the Nikkei under pressure.
Equity financing deals from Tobu Railway <9001.T> and textile
firm Toyobo Co <3101.T> weighed on their share prices and the
prospect of more also hit the broader market.
"The impact of the deals may be short-lived, but if there are
more due to the recent recovery in the stock market, further
falls are likely," said Yutaka Miura, a senior technical analyst
at Mizuho Securities.
Tobu, a Japanese rail operator and property developer,
tumbled 13 percent to 396 yen after it said it would raise as
much as $1.1 billion in a share offering to buy back convertible
bonds maturing in 2014. The offering could boost its outstanding
shares by 25 percent.
Toyobo tumbled 7.5 percent to 136 yen after the firm said it
would raise up to $227 million by offering new shares, increasing
the number of outstanding shares by up to 18.7 percent.
It will tap overseas investors to fund an expansion of
production capacity for industrial film used for flat panel
displays and touch screen panels.
Overseas investors were net buyers of Japan stocks last week
for a 16th straight week, marking the longest buying streak since
late 2005 to the early 2006.
Foreigners bought a net 621.3 billion ($7.5 bln) of Japan
stocks last week, during which the Nikkei hit a 9-month high,
data showed.
CSK <9737.T> jumped 12.5 percent to 386 yen after the Nikkei
business daily reported that Sumitomo Corp <8053.T> aims to buy a
majority stake in the firm. Sumitomo's ACA Investments, currently
owns 36 percent of CSK's outstanding shares, making it the
company's largest stakeholder, the Nikkei said. []
(Editing by Joseph Radford)
