* Nikkei trims losses in midafternoon on futures buying
* TEPCO shares untraded on report of nationalisation
* Mizuho Financial Group plunges on FSA inspection
By Ayai Tomisawa and Antoni Slodkowski
TOKYO, March 29 (Reuters) - The Nikkei share average was flat on Tuesday as futures buying offset growing worries about Japan's crippled nuclear plant and the impact of the earthquake and tsunami on corporate earnings, but analysts said such buying may not be strong enough to improve sentiment in the longer term.
The Nikkei's fall was exaggerated by around 83 points, according to estimates by market players, as it came under more selling pressure after the date passed for investors to receive dividends for the current business year ending March 31.
After closing the morning session down 1.5 percent, futures-led buying kicked in during the afternoon, encouraged by gains in Asian markets, which helped trim the Nikkei's losses.
"Futures buying can be a short-term catalyst to help the market. But I don't think the soured mood (by nuclear operator TEPCO) can bring back investors' appetite so soon," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
Shares of Tokyo Electric remained untraded on a glut of sell orders after the Yomiuri newspaper said the government would temporarily nationalise it and help pay compensation for damage caused by its Fukushima nuclear plant. National Strategy Minister Koichiro Gemba said later that a discussion about bailing out Tokyo Electric was possible. [ID:nL3E7ET007]
"The situation in Fukushima has a big, underlying impact on the market, with worries over the plant likely impacting Wall Street yesterday," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
Plutonium found in soil at the Fukushima complex heightened alarm on Tuesday over Japan's protracted battle to contain the world's worst nuclear crisis in 25 years.[ID:nL3E7ES2ND]
"Investors are spooked by the news report (about TEPCO)," said Hajime Nakajima, a trader at Cosmo Securities.
"As long as there are concerns that TEPCO may be nationalised, investors don't want to hold the stock. Passive funds are selling too," Nakajima said, adding that investors were reminded of panic selling of Japan Airlines shares last year when it decided to decrease capital.
In midafternoon, the benchmark Nikkei was down 0.1 percent or 8.29 points at 9,470.24 after hitting an intraday low of 9,317.38 in morning trade. The broader Topix lost 0.8 percent to 851.16.
Analysts said an immediate support level for the Nikkei is seen around 9,300.
Japanese shares have lost about 7.5 percent since the earthquake, tsunami and threat of a nuclear disaster triggered the biggest two-day rout on the market since 1987. In comparison, MSCI's index of Asian shares outside Japan has gained 2.9 percent since the quake.
The head of the Tokyo Stock Exchange said on Monday that some Japanese companies, mainly manufacturers, will likely be late in announcing full-year earnings for this business year because of the earthquake and tsunami, which in turn would delay the payment of dividends.[ID:nL3E7ES1ED]
Mizuho Financial Group plunged 5.4 percent to 141 yen in heavy trade after the Financial Services Agency said on Monday it will inspect Mizuho Bank over its recent computer system trouble.
Mizuho was the fourth most actively traded share on the Tokyo exchange's first section by turnover .
But Nippon Chemi-Con Corp soared 12 percent to 386 yen after Macquarie Securities raised its rating to "outperform" from "neutral", saying that although its earnings may be hit by production delays due to the earthquake, it may improve from the July-September quarter as the positive outlook for the aluminium capacitor industry remains intact. (Editing by Chris Gallagher)
Reuters Terminal users can see other related news and rates by double-clicking on: All Nikkei indices <0#.NIKKEI> All shares listed on The benchmark Nikkei ended the day up 1.1 percent or 101.12 points at 9,536.13, Nikkei-225 <0#.N225> N225 index TOPIX index Nikkei Japan 1000 TOPIX sector data Nikkei 300 index TOPIX futures data <0#JTI:> Osaka N225 data <0#JNI:> Chicago N225 data <0#NK:> Top 30 by volume Top 30 by value Total volume Total value 1st section sector RICs All TSE weighted avg Top 30 gainers by pct Top 30 losers by pct Top 30 net gainers Top 30 net losers
Active Japanese stocks Japan economic indicators
ASIA-PACIFIC STOCK MARKETS: Pan-Asia Japan S.Korea S.E. Asia Hong Kong Taiwan Australia/NZ India China
OTHER MARKETS: Wall Street Gold Currency Eurostocks Oil JP bonds ADR Report LME metals US bonds Stocks News US Stocks News Europe
DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Japan diary Wall Street Week Ahead Eurostocks Week Ahead
TOP NEWS:
For top Asian company news: Top News Japan U.S. company news Europe company news Forex news Global Economy news All Equity news Tech, Media, Telecoms Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com
LIVE PRICES & DATA: World stocks <0#.INDEX> Currencies Dow Jones/NASDAQ Debt <0#USBMK=> FTSE 100 LME price overview Yen/dollar