Nikkei set to rise after US rally, Mazda in focus

TOKYO, Nov 19 (Reuters) - Japan's Nikkei average is expected to firm on Wednesday following an overnight rise on Wall Street, though global recession fears may limit gains in Tokyo shares.

One stock to watch will be Mazda Motor Corp. Ford Motor Co, scrambling for cash as the U.S. Big Three automakers struggle to stay alive, will end 12 years of control of Mazda through the sale of a 20 percent stake in the Japanese carmaker for around $540 million.

U.S. stocks staged a late fight back on Tuesday after a choppy session in which stronger-than-expected results from computer maker Hewlett-Packard offset fears that more losses at Citigroup and other banks are yet to come.

"Market participants don't know if they should take Tuesday's late rally in U.S. stocks at face value, although it's a positive factor for Japanese stocks," said Tsuyoshi Segawa, an equity strategist at Shinko Securities.

"Movements in share prices may remain volatile as the market still lacks a sense of direction overall," Segawa said.

Nikkei futures traded in Chicago closed at 8,510 on Tuesday, 190 points above their close in Osaka.

Market participants expect the benchmark Nikkei to trade between 8,200 and 8,600 on Wednesday.

It shed 2.3 percent on Tuesday to end at 8,328.41. ----------------------MARKET SNAPSHOT @ 2305 GMT ------------

LAST PCT CHG NET CHG S&P 500 859.12 0.98% 8.370 USD/JPY 96.82 -0.11% -0.110 10-YR US TSY YLD 3.5275 -- 0.000 SPOT GOLD 737.75 0.13% 0.950 US CRUDE 54.5 0.20% 0.110 DOW JONES 8424.75 1.83% 151.17 ------------------------------------------------------------- > US STOCKS-Wall St barrels back in late rally, led by HP > Dollar rises vs euro, sterling as Wall St tumbles > Treasuries rally after record producer price fall > Platinum rises on bargain-hunting, gold weakens > Oil falls as recession fears drag down markets STOCKS TO WATCH

-- NTT DoCoMo

Japan's biggest mobile phone carrier will team up with South Korean firm KT Freetel Ltd to develop a smart phone featuring free software from Google Inc to compete with Apple Inc's iPhone, the Nikkei business daily said on Wednesday.

-- Mitsubishi UFJ Financial Group

Mitsubishi UFJ Financial Group posted a 61 percent decline in second-quarter profit on Tuesday and stuck to its recently lowered full-year forecast, hit by a recession at home and losses on its extensive stock portfolio.

-- Mazda Motor Corp Ford Motor Co, scrambling for cash as the U.S. Big Three automakers struggle to stay alive, will end 12 years of control of Mazda through the sale of a 20 percent stake in the Japanese carmaker for around $540 million.

Mazda said on Tuesday it would buy back 6.87 percent of its own shares from Ford for up to 17.9 billion yen ($184.5 million), keeping them as treasury stock. More than 20 undisclosed business partners will purchase the remaining 13 percent.

-- Sumitomo Rubber Industries Ltd

Japan's second-biggest tyre maker plans to start selling in Japan tyres which include no petrochemical materials by 2013, a company spokesman said on Tuesday.

The company has set a medium-term strategy to fight global climate change by introducing a tyre which uses as little raw material made from oil as possible and spins more smoothly than a conventional tyre.

-- Sanyo Electric Co Ltd

Sanyo said on Tuesday it is recalling some 280,000 clothes washer/dryer units due to a risk of smoke or fire when the dryer is run. The cost of the recall was likely to be around 5 billion yen.

-- Koei Co Ltd, Tecmo Ltd

Japanese videogame maker Koei Co will take over smaller rival Tecmo in a stock deal worth 20 billion yen, the two firms said on Tuesday, the latest in a series of consolidation moves in the industry. ($1=97.01 Yen) (Reporting by Rika Otsuka; Editing by Michael Watson)