TOKYO, April 12 (Reuters) - Japan's Nikkei stock average is expected to inch lower for a second straight session on Tuesday after oil dropped nearly 3 percent and spurred a selloff in energy shares on Wall Street.
Kicking off the cautiously awaited earnings season in the United States, Alcoa Inc reported a first-quarter profit that beat estimates, but revenue of the aluminium maker missed forecasts and the stock fell 3.6 percent in post-market trade.
With market players awaiting the first post-quake earnings in Japan, trading volumes are poised to remain low and the benchmark will likely stay trapped on Tuesday between 9,612.51 -- where April Nikkei options settled last week -- and its 200-day moving average at 9,816.
"With so many uncertainties surrounding big players, investors will likely move to small-cap stocks," said Takashi Hiroki, chief strategist at Monex Securities.
"After gold, oil and other commodities fell, energy shares will come under pressure, especially after recent gains. But overall, with the situation in the country unchanged the Nikkei will probably move in a narrow range," Hiroki said.
Analysts said that while falling commodities prices will pressure energy stocks, they will also help to ease worries over the impact of rising raw material costs on input costs and margins, providing some support to the market.
Nikkei futures in Chicago <2NKc1> pointed to a weaker start
in Tokyo. They were at 9,650, down from the Osaka close
The benchmark index closed down 0.5 percent or 48.38 points at 9,719.70 on Monday, with volumes falling to the lowest level since the quake as investors await earnings reports.
The Nikkei has already recouped about two-thirds of the ground lost since the March 11 earthquake, but analysts said from now on potential gains before earnings will likely be hard won.
Tokyo Electric Power will remain in focus, investors said. Trade in the energy giant accounted for some 10 percent of total volume on the Tokyo bourse's main board on Monday.
Tepco could face 2 trillion yen ($23.6 bln) in special
losses in the current business year to March 2012 to compensate
communities near its crippled nuclear plant, JP Morgan said in a
research report obtained by Reuters on Monday. [ID:nL3E7FB1RB]
---------------------MARKET SNAPSHOT @ 2217 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 1324.46 -0.28% -3.710
USD/JPY 84.73 0.08% 0.070
10-YR US TSY YLD 3.5866 -- 0.004
SPOT GOLD 1460.59 -0.42% -6.160
US CRUDE
> Markets fall on earnings caution, energy selloff > Dollar rebounds vs euro but bearish outlook persists > U.S. yields end steady in advance of supply > Gold, silver retreat from highs along crude > Oil falls from 32-month high on demand concern
STOCKS TO WATCH
--Tokyo Electric Power Co
Tokyo Electric Power Co will not pay a dividend for fiscal 2010 and will also forgo payouts for this year, hit by increasing losses from the nuclear emergency at its Fukushima Daiichi nuclear power plant, the Nikkei daily reported. [ID:nL3E7FB32A]
Separately, Tepco could face 2 trillion yen ($23.6 bln) in special losses in the current business year to March 2012 to compensate communities near its crippled nuclear plant, JP Morgan said in a research report obtained by Reuters.[ID:nL3E7FB3NH]
--Toyota Motor Corp
Toyota might face limited production through July due to Japan's March 11 earthquake and its aftermath, its U.S. sales chief, Bob Carter, said in a note to dealers.[ID:nN1192492]
--Panasonic Corp
Panasonic plans to enter the microelectromechanical systems(MEMS) market and develop and commercialize MEMS sensors and devices from this year, the Nikkei business daily reported. [ID:nL3E7FB35I]
--Sekisui House Ltd
Sekisui will expand its Chinese real estate development business with a roughly 100 billion yen project to build high-end condominiums and single-family homes in Suzhou, Jiangsu Province, the Nikkei business daily said.
The daily said Japan's largest homebuilder plans to put up about 4,000 residential units on two sites, one in the city center and one on the outskirts, acquired in a deal with the city. (Reporting by Antoni Slodkowski; Editing by Chris Gallagher)