Nikkei falters on profit-taking after surge

                                
 * Nikkei slips 0.4 pct but up 9.1 pct so far in November
                                
 * Nikkei on track for biggest monthly rise since March
                                
 * Foreigners net buyers last week for third week running
                                
 * Recent overseas buying likely includes fresh funds -analyst
                                
 By Antoni Slodkowski
                                
 TOKYO, Nov 26 (Reuters) - Japan's Nikkei share average dipped
0.4 percent on Friday, held back by profit-taking after rallying
nearly 10 percent so far this month on a pick-up in overseas
investor demand for Japanese equities.
                                
 Trading volume was thin after the U.S. Thanksgiving holiday
and ahead of the weekend, with about 1.7 billion shares changing
hands on the Tokyo exchange's first section, well below the daily
average of 2.1 billion shares over the past five sessions.
                                
 The benchmark Nikkei <.N225> fell 40.20 points to 10,039.56
but was still up 9.1 percent so far for November, on track for
its biggest monthly percentage rise since a 9.5 percent gain in
March.
                                
 The broader Topix index <.TOPX> dipped 0.3 percent to 866.81.
                                
 The Nikkei has outperformed its overseas peers this month,
helped by the dollar's rebound against the yen and buying of
Tokyo shares by overseas investors.
                                
 "Recent purchases by foreign investors are not simply short
covering but I think fresh funds being poured into Japanese
shares. More follow-through buying could drive up share prices
further," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ
Morgan Stanley Securities.
                                
 "Our next major focus would be consumption in the United
States during the holiday season. Any strong signals in U.S.
economic indicators, especially in consumption and jobs, would
prompt more fund flows into share markets."
                                
 Overseas investors were net buyers of Japanese stocks for a
third straight week last week, buying a net 172.0 billion yen
($2.1 billion) in the week to Nov. 20, finance ministry data
showed. That brings their total net buying in November to 464.0
billion yen. [JP/CAP]
                                
 Overall sentiment in the market remains bullish, with many
market players now predicting the Nikkei is likely to end the
year around the 10,500 mark.
                                
 Shares in Hitachi Ltd <6501.T> dropped 1.5 percent to 396 yen
after Britain's government delayed until next year a decision on
how to replace ageing Intercity express trains, a project
analysts believe will cost around 7.5 billion pounds ($11.82
billion).
                                
 Agility Trains, a consortium consisting of Hitachi and
British infrastructure project manager John Laing, is the
preferred bidder on the contract. [ID:nLDE6AO0BQ]
 ($1=83.58 Yen)
 ($1=.6345 Pound)
 (Additional reporting by Chikafumi Hodo; Editing by Edmund
Klamann)