* Nikkei gives up gains after starting higher
* Financials down on report of Nomura loss, U.S. worry
* Trading houses down after Mitsui & Co slashes estimates
By Elaine Lies
TOKYO, April 23 (Reuters) - Japan's Nikkei stock average
slipped 0.5 percent on Thursday, as trading firms fell after
Mitsui & Co <8031.T> slashed its earnings estimates and financial
firms were hit by a report of a large loss for Nomura Holdings
<8604.T>.
But Pioneer <6773.T> surged more than 7 percent after a
company source said Honda Motor Co <7267.T> was finalising plans
to invest several billion yen in the struggling electronics
maker. Honda rose as well. []
The Nikkei business daily reported that Nomura, Japan's
largest brokerage, may post a net loss of 700 billion yen for the
year that ended in March, due mainly to costs related to buying
Lehman Brothers' operations. []
The 700 billion yen loss would be one of the largest likely
to be posted by a Japanese company for the last financial year.
Analysts said investors were caught between positive news for
some companies and negative news for others. Many were also
reluctant to buy actively ahead of a slew of events including the
announcement of results of U.S. government "stress tests" on the
nation's largest banks.
"The market has gotten very sensitive in the short-term to
company news, buying on good news and selling on bad," said
Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"Today, it's really half and half -- cars and techs up,
financials and trading houses down."
In the United States, growing fears for the U.S. financial
system fuelled by poor results from Morgan Stanley <MS.N> were
offset by Apple <AAPL.O> reporting stronger-than-expected
quarterly results. []
The International Monetary Fund said on Wednesday the world
economy had fallen into a severe recession, cutting its forecast
for global growth and calling for forceful action to spur a
recovery. []
"It seems as if there should be a positive impact from a lot
of economic policies, but then when you look over your shoulder
there's things like the IMF downgrading its assessment of the
world economy," said Hiroichi Nishi, general manager at the
equity division of Nikko Cordial Securities.
"Given upcoming Japanese earnings results, the results of the
U.S. bank stress tests, and the still unknown fate of GM, it's
going to be hard for the market to find direction."
The benchmark Nikkei <> shed 40.66 points to 8,686.64,
while the broader Topix <> lost 0.3 percent to 827.60.
CAUGHT IN RANGE
Canon Inc <7751.T> rose 1.2 percent to 2,920 yen after the
Nikkei business daily said it was likely to beat analysts'
estimates by reporting an operating profit for the latest
quarter, and it may lift its annual forecast by nearly 13
percent. []
Nomura, also hit hard by trading losses, exposure to Iceland
and accused swindler Bernard Madoff, which forced it to raise
about 280 billion yen in March through a share issue, slid 3.7
percent to 576 yen.
Trading house Mitsui & Co <8031.T> fell 4.9 percent to 1,056
yen after slashing its net profit estimate for the year just
ended to 180 billion yen from 310 billion yen.
The sector has been been battered by falling commodities
demand and other trading houses also dropped.
Mitsubishi Corp <8058.T> lost 3.5 percent to 1,492 yen, and
Itochu Corp <8001.T> fell 3.3 percent to 529 yen.
But carmakers bucked the trend, with Honda rising 1.7 percent
to 2,760 yen and Toyota Motor Co <7203.T> climbing 2.1 percent to
3,840 yen, buoyed by signs the U.S. market may have bottomed out.
Shares of Pioneer rose 7.5 percent to 346 yen, extending gains
from the previous day when it jumped on a report it may receive
public funds to shore up its capital.
Japanese brewer Kirin Holdings <2503.T> gained 1.7 percent to
1,096 yen after it made an approach to buy out Australia's second
biggest brewer Lion Nathan Ltd <LNN.AX> in a deal worth $1.7
billion at current prices. []
Trade was light on Tokyo exchange's first section, with 998
million shares changing hands compared to last week's morning
average of 1.2 billion.
Declining stocks outnumbered advancing ones, 960 to 592.
(Reporting by Elaine Lies)
