Roundup: Nikkei adds 0.17 pct. but gains capped by profit-taking

The Nikkei stock index added 0.17 percent Wednesday as investors bought stocks ahead of Friday so they can receive dividend payouts, but the market also came under pressure from selling for profits as some market players believed the price of Japanese stocks had become overvalued.

The Nikkei 225 index gained 32.75 points from Tuesday to close at 19,746.20, while the broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 4.42 points, or 0.28 percent, higher at 1,592.01.

Local brokers said that trade got off to a poor start following a weak lead from Wall Street overnight, but as some shares will turn ex-dividend this week, investors were seen snapping up these options, to ensure they receive the payouts.

"The market is being supported by buying for dividends on shares in companies closing their books this month," said Ayako Terada of Nomura Securities Co.'s investment research department.

Other analysts pointed to the fact that due to the market having gained so much recently, logging a series of 15-year closing highs recently, there were now some concerns of overheating and some selling was prompted by fears stocks may be overvalued.

SMBC Nikko Securities Inc.'s Masashi Akutsu said"Japanese stocks had been rising at a fast pace recently, so there's wariness that prices are overvalued."

But traders noted that gains made by textile makers, real estate issues and rising utility-related stocks, helped keep the market in positive territory on Wednesday.

Textile maker Toray Industries was solid, advancing 2.9 percent to finish at a near 9-year high at 1,051 yen, while Teijin Ltd., who make polyester, gained 3 percent to close the day 415 yen.

Nippon Telegraph and Telephone (NTT), meanwhile, also closed in positive territory, leaping 2.5 percent to 7,660 yen, following Barclays lifting its rating on the firm's stock to from"equal weight"to"overweight"and raising its price target by 37 percent to 8,900 yen.

Plant engineering and procurement firm Toyo Engineering lost ground however, plummeting 15 percent to 335 yen, after announcing mechanical problems at its Brazilian subsidiary that combined with extra costs will result in losses to the tune of 17 billion yen ( 142 million U.S. dollars).

Pharmaceutical companies were pressured by profit-taking, with Eisai Co.falling 5.4 percent to 9,050 yen, after the drug maker surged as much as 30 percent in two days, following the initial phase of its partner firm Biogen Idec Inc.'s tests on treating Alzheimer's disease showing some positive results.

But Santen Pharmaceutical Co. made significant gains, jumping 7. 6 percent to 9,050 yen, after the specialist in medicine relating to ophthalmology and rheumatology, raised both its profit forecast and dividend.

Oil exploration giant Inpex sank 1.2 percent to 1,347 yen as part of a wider decline of oil and energy shares, but Kyushu Electric advanced 3.1 percent to 1,127 yen, after Japan's nuclear watchdog said it will begin safety inspections at the utility's Sendai No. 1 plant on March 30.

Trading volume on Wednesday increased to 2.14 billion shares on the Tokyo Exchange's First Section, up from Tuesday's volume of 2. 09 billion shares, with declining issues outnumbering advancing ones by just 891 to 851. Endi