Nikkei little changed, stuck by worry rates

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SINGAPORE, Nov 21 (Reuters) – Japan’s Nikkei share average was flat on Monday, hovering below 28,000, as rising COVID-19 cases in China dampened investor sentiment in Asia and that traders were waiting for more clarity on the direction of interest rates and inflation.

The Nikkei was flat at 27,889 just after the lunch break. The broader Topix was stable at 1,967. Both indices have been treading water for about a week. Volumes were expected to be light due to US and Japanese holidays later in the week.

“Financial markets are trying to balance the possibility of further rate hikes against the extent to which the US and global economy will slow,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management.

Japan’s economy, he said, appeared stable as the post-pandemic reopening gathers pace and inflation finally picks up after years of deflation, although the global outlook and its implications for Japanese exporters have kept markets cautious.

Sapporo Holdings Ltd led the gains rising 3%. Reopening hopes have pushed the brewer’s stock up more than 7% this month and it’s on track for a fourth straight monthly rise.

Trading houses also performed well, benefiting from high and volatile commodity and energy prices. Shares of Marubeni were up 2% midday and hit a record high of 1,514 yen in morning trading. They are up 34% this year.

Those increases were offset by declines driven by insurer Sompo Holdings, which fell 9% after reporting a six-month net loss in the secondary market on Friday. Weak results earlier in the month were also a drag on Nintendo and shares fell 1%.

The volume of shares traded on the main board of the Tokyo Stock Exchange was 0.52 billion, compared to an average of 1.28 billion over the past 30 days. The dollar remained stable at 140.38 yen during the session. (Reporting by Tom Westbrook in Singapore; Editing by Savio D’Souza)

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