* Nikkei trading largely directionless
* 25-day moving average offers solid support near 9,800
* ANA, Orix tumble on news of possible share offering
* Construction machinery makers rise after China PMI
By Elaine Lies
TOKYO, July 1 (Reuters) - Japan's Nikkei stock average clawed
up 0.1 percent on Wednesday in largely directionless trade, with
Orix Corp <8591.T> and All Nippon Airways <9202.T> sliding on
news of possible public share offerings.
Construction machinery makers such as Komatsu <6301.T> gained
after China's official purchasing managers' index (PMI) for June
showed the country's economic recovery is on more solid ground,
while rises by an array of defensive shares also offered support.
Response to the Bank of Japan's quarterly survey of business
confidence was mixed, with some analysts saying it had no impact
on the market, but others, noting lagging capital spending,
saying it was slightly negative.
Confidence among big manufacturers pulled back from a record
low hit three months ago, the Bank of Japan's tankan corporate
survey showed, as exports and output improved from a severe
downturn late last year. []
But figures showed big firms plan to cut capital spending, a
key driver of the economy, by 9.4 percent in the financial year
to March 2010, against the market's median forecast for a 6.9
percent fall.
"Basically, the tankan showed that things aren't all that
good in the near-term but seemed encouraging for the longer term,
making its overall impact neutral," said Kenichi Hirano,
operating officer at Tachibana Securities.
"I'd have liked to see slightly better capital spending, but
given the current situation it's only natural that it should fall
-- after all, with production down, the last thing manufacturers
can do right now is spend."
In thin and narrow trade, the benchmark Nikkei <>
wobbled from negative to positive territory, gaining 8.88 points
to 9,967.32, while the broader Topix <> rose 0.1 percent to
930.56.
Support was solid for the Nikkei at around 9,800, about where
the 25-day moving average comes in.
The Nikkei rose nearly 23 percent in the April-June quarter,
its best quarterly gain since a 23.4 percent rise in the
July-September quarter of 1995. But Hirano said it would be
tougher to make gains this quarter as the market would be working
through a number of factors, including company earnings starting
later this month.
TUMBLING ON PUBLIC OFFERING
All Nippon Airways Co (ANA) and Orix slid after news of
possible public share offerings, with ANA becoming the biggest
drag on the Nikkei 225.
ANA, Japan's second-largest airline, plans to raise more than
150 billion yen ($1.6 billion) in a public share offering, five
sources familiar with the matter said. []
Orix, Japan's biggest leasing firm and a major property
investor, plans to raise about 100 billion yen ($1 billion)
through a public share offering, three people familiar with the
matter said. []
Orix would become the latest in a series of Japanese
financial firms to tap recently more buoyant equity markets for
funds, amid signs the economy and property market to which it is
heavily exposed may have bottomed out.
Orix lost 5.7 percent to 5,480 yen and ANA fell 5.9 percent
to 317 yen. ANA's rival Japan Airlines <9205.T> lost 1.1 percent
to 184 yen.
But selling pressure, augmented by dealers moving to lock in
profits as the Nikkei edged back up towards 10,000, was countered
by investor buying of a wide array of defensive shares, such as
drugmakers, as well as chip shares such as Advantest Corp
<6857.T>, up after a supportive performance by U.S. peers.
China's PMI for June rose to 53.2 from 53.1 in May, the
fourth straight month that the official PMI has stood above the
pivotal 50 mark.
As a result, Komatsu and Hitachi Construction <6305.T>, which
often rise with signs of brightening in China's economy on
expectations of building projects there, both rose.
Komatsu gained 2.6 percent to 1,531 yen and Hitachi
Construction rose 1.9 percent to 1,605 yen.
Trade fell off slightly, with 968 million shares changing
hands on the Tokyo exchange's first section compared to last
week's morning average of 1.3 billion.
Declining shares outnumbered advancing ones 769 to 745.
(Reporting by Elaine Lies; Editing by Joseph Radford)
