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Nikkei edges higher, Showa Shell climbs

Published 06/24/2009, 01:47 AM
Updated 06/24/2009, 01:56 AM
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* Firmness in Asian shares helps Nikkei

* Support seen at 9,500

* Showa Shell Sekiyu surges on Saudi solar power business

By Masayuki Kitano

TOKYO, June 24 (Reuters) - Japan's Nikkei stock average edged higher on Wednesday as investors picked up some battered shares, with energy shares such as Nippon Oil rising after crude oil surged the previous day.

Showa Shell Sekiyu climbed about 6 percent on its plans to work with Saudi Aramco Oil Co on a feasibility study on solar power business in Saudi Arabia.

The Nikkei turned higher after finishing the morning slightly lower, as investors drew comfort from the firmness of other Asian stock markets after being nervous about the Nikkei's 2.8 percent decline the day before. But its gains were limited in the face of bearish technical signals and uncertainty ahead of the end of the U.S. Federal Reserve's policy meeting later on Wednesday.

"Since the Nikkei was near the key 9,500 level, that helped create a mood for investors to try some bargain hunting," said Mitsushige Akino, chief fund manager for Ichiyoshi Investment Management.

The Nikkei rose 0.5 percent or 49.52 points to 9,599.13, up from 9,544.09 at the end of the morning session.

The broader Topix rose 0.2 percent to 903.43.

Even though the Nikkei has held above 9,500, bearish signals are showing up on technical charts.

The Nikkei earlier this week fell below its 25-day moving average. In addition, the 5-day moving average is nearly at the 25-day moving average and could cross below it soon, a move known as the "Death Cross" and which is often a bearish signal.

A similar pattern appeared in late April, where an apparently imminent Death Cross was avoided at the last moment and instead signalled the bottom of a brief dip.

Oil fell 1.2 percent on Wednesday after climbing 3.5 percent the day before, but energy shares were higher, with Nippon Oil rising 2.1 percent to 548 yen and Inpex rising 0.4 percent to 719,000 yen.

Showa Shell Sekiyu shares surged 5.9 percent to 1,041 yen.

Japan's wireless carrier Softbank Corp climbed 5.8 percent to 1,805 yen after UBS Securities raised its 12-month target price for Softbank's shares to 2,400 yen from 1,960 yen. (Additional reporting by Elaine Lies; Editing by Edwina Gibbs)

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