* Nikkei pares morning gains as Shanghai dips
* Losses limited after upbeat results from JPMorgan
* Commodities prices lift shares of miners, trading houses
By Antoni Slodkowski
TOKYO, Jan 17 (Reuters) - Japan's Nikkei average gave up
earlier gains to go flat on Monday, reflecting a slump in Chinese
equities after the People's Bank of China hiked lenders' required
reserves.
The Nikkei was stuck in a tight range as energy-related
stocks gained on higher oil prices, but there was a fall in
construction machinery makers with big exposure to China, such as
Komatsu Ltd <6301.T>.
"Both the Shanghai and Hong Kong markets opened lower on
Monday, souring the mood on the Nikkei. The CPI figures due on
Thursday are also making markets a little jittery," said Hideyuki
Ishiguro, a supervisor in the investment strategy section of
Okasan Securities.
Although economists polled by Reuters said China's consumer
price index may show a cooling of inflation from November's
28-month highs, they also reckoned any slowdown in inflation
would likely be temporary. []
Komatsu, which relies on China for about 20 percent of its
sales of construction, mining and utility equipment, shed 1
percent to 2,513 yen and Hitachi Construction Machinery <6305.T>
was 1.2 percent lower at 2,019 yen.
"But it's not all bad news on the Nikkei with the downside
limited as investors are encouraged by a strong start to the
earnings season in the U.S. and are waiting for more big firms to
show strong results," Ishiguro said.
Results from Apple <AAPL.O>, due on Tuesday, are a key
immediate focus for the market. Economic bellwether General
Electric <GE.N> as well as big tech names such as Google <GOOG.O>
and eBay <EBAY.O> are also due to report.
The benchmark Nikkei <> rose earlier on stronger
earnings than expected from JPMorgan <JPM.N>. By afternoon it was
up 5.66 points at 10,504.70.
On Friday it fell 0.9 percent after a surprisingly weak
settlement of options for January.
Resistance for the benchmark now looms at 10,620.57, an
eight-month high hit last week. If that level is breached, the
next target investors are eyeing is 10,638.23, a high hit in May
last year.
The broader Topix index <> shed 0.1 percent to 929.65.
FOREIGNERS SET TO KEEP BUYING
The Nikkei has climbed 2.6 percent this year and is up 15
percent since the start of November -- a rally driven by foreign
funds, which have boosted their stance on Japanese stocks to
neutral from underweight.
"Foreign buying will probably continue further as
expectations for Japanese firms to post strong results have been
heightened by robust U.S. earnings," said Fumiyuki Takahashi, an
equity strategist for Barclays Capital Japan.
"Foreigners have been buying domestic demand-related shares
like banks and property recently, but they may switch back to
exporters if the yen stays stable and if we see some more solid
earnings announcements in the U.S. high-tech sector."
Higher prices of commodities, with Brent crude rising above
$99 a barrel on Friday, helped shares of trading houses and other
oil-related companies. Inpex Corp. <1605.T>, Japan's top oil and
gas developer, gained 0.5 percent to 489,500 yen.
Shares of non-ferrous metals smelters also rose as benchmark
three-month copper on the London Metal Exchange <CMCU3> jumped to
$9,679.50 a tone in Asia on Monday from $9,650 on Friday. Dowa
Holdings Co <5714.T> advanced 1.6 percent to 558 yen.
