* Oil price surge buoys recovery hopes, oil stocks gain
* Shanghai rebound a plus, but investors wary
* Truckmakers, Mazda gain on brokerage upgrades
* Eyes on Japan Aug 30 election
By Elaine Lies
TOKYO, Aug 20 (Reuters) - Japan's Nikkei stock average on
Thursday climbed from a three-week closing low, buoyed by
resource shares after crude oil surged and by rekindled recovery
hopes, with a rebound in Chinese shares also giving a lift.
Truckmaker shares climbed after a brokerage upgrade, with
Isuzu Motors <7202.T> up more than 5 percent, and trading houses
gained on strong metals prices.
Investors took heart after the Shanghai Composite Index
<> rose 1.8 percent after falling to its lowest close in two
months on Wednesday, but many remained wary and trading volume
was lacklustre.
"People are definitely still worried about China, and we're
not seeing a lot of enthusiastic buying, with foreign investors
not much of a presence right now either," said Koichi Ogawa,
chief fund manager at Daiwa SB Investments.
"Until Japan's election is over, stocks may find it hard to
move. The market just wants a decision fast, but if the LDP won
it'd be quite a surprise and stocks would probably tumble."
The benchmark Nikkei rose 0.7 percent or 75.19 points to
10,279.19, up from the three-week closing low hit on Wednesday.
The broader Topix <> rose 0.7 percent to 949.84.
Opinion polls have shown the opposition Democratic Party well
ahead of the conservative ruling Liberal Democratic Party (LDP)
in the Aug. 30 race for the lower house of parliament, raising
the prospect that the business-friendly LDP will lose power for
only the second time in its 54-year history. []
The Asahi newspaper said on Thursday that the Democrats could
win about 300 of the 480 seats, though it added that things could
shift in the final days of the race. []
Though analysts said the article could actually have
increased uncertainty about the outcome by prompting some voters
to shift to the LDP, most said China was still the big concern.
"Given that the world is looking to Asia and China in
particular to lead it out of recession, any downward fluctuations
in Chinese stocks are keenly watched as a clue to what's going on
in its economy," said Hiroichi Nishi, general manager at the
equity division of Nikko Cordial Securities.
China shares slid 4.3 percent on Wednesday, led by recently
listed shares, as nervous investors pulled out on worries the 20
percent slide in just two weeks would deepen more. []
"I think there's no question that China was overbought, and
for Japan to simply rise in tandem hasn't been all that good a
thing either," said Nagayuki Yamagishi, a strategist at
Mitsubishi UFJ Securities.
ENERGY HOT
But most in the market said they felt Japan's dip this week
was probably still within the range of a natural fluctuation,
with support set to hold around 10,100 -- roughly where the
25-day moving average comes in.
Energy shares dominated in the wake of oil's Wednesday surge
after U.S. government data showed a steep drop in crude imports
and inventories, though crude was drifting lower on Thursday.
<CLc1> []
The surprising drop in stockpiles lifted Wall Street on hopes
that it could suggest an improving demand outlook and economy,
but analysts said higher prices were a two-edged sword.
Oil and gas field developer Inpex gained 2.4 percent to
718,000 yen, while distributor Nippon Oil <5001.T> rose 2.1
percent to 532 yen.
Trading houses rose on both the oil gains and a recovery in
metals prices, with Marubeni <8002.T> gaining 1.7 percent to 469
yen and Itochu Corp <8001.T> up 1.4 percent to 660 yen.
Isuzu and Hino Motors <7205.T> climbed after Nikko Citigroup
upgraded them to "hold" from "sell," saying that truckmaker
earnings could turn around in the second half of the current
financial year on better overseas demand than the companies had
originally planned.
Isuzu climbed 5.4 percent to 197 yen and Hino Motors rose 4.3
percent to 388 yen.
Mazda Motor <7261.T> gained 2.3 percent to 266 yen after KBC
Securities raised its view to "positive" from "neutral".
Unicharm Corp <8113.T>, the top Asian manufacturer of diapers
and sanitary goods, gained 1.9 percent to 8,060 yen after the
Nikkei business daily reported the company would enter the U.S.
diaper market through a joint venture with Swedish peer Svenska
Cellulosa AB <SCAb.ST>.
Trade was moderate on the Tokyo exchange's first section,
with 958 million shares changing hands, compared with last week's
morning average of 932 million.
Advancing stocks outnumbered declining ones by 859 to 616.
(Reporting by Elaine Lies; Editing by Hugh Lawson)
