* Nikkei edges up but rises stalled by economic worries
* Support to hold at 25-day moving average just under 9,600 * Sanyo Electric surges on hopes for batteries
* Daiwa Securities up on talk of DaVinci buy
By Elaine Lies
TOKYO, June 17 (Reuters) - Japan's Nikkei stock average edged up 0.4 percent on Wednesday, with Sanyo Electric surging after saying it had secured buyers for its batteries that are used in hybrid cars.
Daiwa Securities Group Inc and KK DaVinci Holdings also climbed after sources said Japan's second-largest broker would buy a DaVinci real estate management unit to expand its property business.
But Mitsubishi Corp and other resource shares fell on lower oil and metals prices, and gains for the Nikkei were capped after mixed indicators underscored doubts about how fast the U.S. recession is easing.
A rebound in U.S. housing starts in May pointed to some stabilisation in that sector, but industrial production fell 1.1 percent and capacity utilisation slumped to its lowest level on records dating back to 1967.
Still, market analysts said they believed the recent rising trend that has lifted global stock markets from bear market lows in March remains intact.
"Globally, nothing's really happened fundamentally to change the overall situation. Both New York and Tokyo have fallen this week on a sense that they were overextended," said Hideyuki Ishiguro, a supervisor at the investment advisory section of Okasan Securities.
"As long as the Nikkei remains above its 25-day moving average I don't think we have to worry, and a fall to 9,000 seems unlikely." At midday, the benchmark Nikkei gained 39.09 points to 9,791.97, while the broader Topix rose 0.4 percent to 918.77.
The 25-day moving average currently comes in at just under 9,600. But the Nikkei on Tuesday fell below its five-day moving average and an uptrend line to fall 2.9 percent, its biggest one-day percentage loss since March 30.
Analysts said given that the Nikkei had lost nearly 400 points on Monday and Tuesday, the market was ripe for bargain-hunting.
"The economy is definitely improving -- after all, the Nikkei rose as far as 10,000 from just over 7,000 in March, which is quite substantial," said Yoku Ihara, a manager at the investment information department of Retela Crea Securities.
SOME SHARES SHINE
Sanyo's shares rose 6.6 percent to 260 yen, outpacing a 0.4 percent gain in the electrical machinery sub-index to become the second-biggest percentage gainer among Nikkei 225 stocks.
It said it had secured car makers in the United States, Japan and Europe as buyers of its auto-use lithium-ion batteries.
Daiwa Securities Group Inc rose 1.2 percent to 655 yen and KK DaVinci Holdings climbed 4.2 percent to 21,350 yen.
Resource shares dropped as oil fell for a fourth day, sliding below $70 after industry data showed U.S. crude stocks fell 1.3 million barrels last week, against forecasts for a 1.7 million barrel draw in a Reuters poll. [O/R}
Copper fell as well, with Shanghai copper down for a fifth day while London traded around its lowest in more than a week.
Trading house Mitsubishi Corp lost 1.4 percent to 1,854 yen and Mitsui & Co shed 1.5 percent to 1,174 yen. Itochu Corp slipped 0.7 percent to 682 yen.
Trade lightened, with 1.2 billion shares changing hands on the Tokyo Exchange's first section compared with last week's morning average of 1.5 billion.
Advancing shares outnumbered declining ones by more than 2 to 1. (Reporting by Elaine Lies; Editing by Edwina Gibbs)