* Short-covering helps prevent market from falling sharply
* Gains limited as concerns over oil prices persist
* Hitachi up on sale of HDD business to Western Digital
By Antoni Slodkowski and Ayai Tomisawa
TOKYO, March 8 (Reuters) - Japan's Nikkei benchmark edged
higher on Tuesday as investors covered short positions after
sharp losses the day before, but future gains are likely to be
hard-won due to concerns about the Middle East and oil prices.
Two major deals were applauded by investors with Hitachi
gaining on the sale of its hard disk drive operations to Western
Digital <WDC.N> for about $4.3 billion, while Terumo Corp
<4543.T> climbed on its purchase of U.S. medical device firm
CaridianBCT for $2.6 billion. [] []
Despite a rise of around 20 percent in U.S. oil prices over
the last two weeks, Japanese stocks have so far proved largely
resilient, and the Nikkei added 1.6 percent last week as
investors reassessed risk within their equities portfolios
instead of moving out of stocks altogether.
"If oil stays in $100-$120 per barrel range for around half a
year the global economy could see a severe slowdown, pushing
investors away from stocks, so everything depends on the Middle
East now", said Koichi Ogawa, chief portfolio manager at Daiwa SB
Investments.
"Shares of exporters such as automakers are being pressured
by higher oil prices. At the same time it's also hard to buy
stocks tied to domestic demand due to political turmoil, with
lack of trust in the government undermining the mood of
consumers."
A member of parliament from Japan's ruling party called on
Tuesday for Japanese Prime Minister Naoto Kan to step down as
soon as possible, Kyodo news agency said, as pressure grows on
the unpopular premier to resign or call a snap election.
[]
By midafternoon the benchmark Nikkei <> was up 0.3
percent, or 28.84 points, at 10,533.86. The broader Topix index
shed 0.1 percent to 940.51.
Hitachi Ltd <6501.T> gained 2 percent to 515 yen in heavy
trade, while Terumo Corp <4543.T> jumped 3 percent to 4,630 yen.
Analysts said that M&As, buybacks and other corporate
activities, which have picked up steam in Japan in recent weeks
will support the benchmark in what could be volatile trade before
the settlement of Nikkei futures and options this Friday.
"The market's fundamentals are recovering on corporate
earnings so sentiment longer term is good. But for the
short-term, the market may see some correction due to continuing
worries about develoments in the Middle East," said Hajime
Nakajima, deputy general manager at Cosmo Securities.
He said support for the Nikkei is seen at its January closing
low of 10,237.
Tech shares followed their U.S. counterparts lower after
Wells Fargo downgraded the semiconductor sector. The Nasdaq
composite index <> dropped 1.4 percent on Monday.
Toshiba Corp <6502.T> fell 0.8 percent to 514 yen and Sony
Corp <6758.T> dropped 0.8 percent to 2,902 yen.
Shinsei Bank <8303.T> surged 4.5 percent to 117 yen in
active trade after it set the price of its new stock offering for
overseas investors at 108 yen per share, a 3.6 percent discount
to Monday's closing price of 112 yen.
Morning volume was moderate, with 1.06 billion shares
changing hands on the Tokyo stock exchange's first section, with
the day's total set to be in line with last week's average daily
volume of 2.2 billion shares.
(Editing by Edwina Gibbs)
