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* Chip Sumco Shares, Tokyo Electron Surge
* Real estate, drug companies and utilities outperformed in March
* Investors cautious about concerns over weak Chinese demand
By Ayai Tomisawa
TOKYO, March 18 (Reuters) – Japan's Nikkei advanced on Monday as chip stocks followed their US counterparts' gains on Friday, but weak February export data limited the upside potential of the market.
The average Nikkei stock rose 0.6% to 21,579.66 at the midday break.
US stocks advanced on Friday, with the S & P 500 posting its best weekly gain since the end of November, while technology stocks helped the Nasdaq post its best weekly gain this year.
Among Japan's chip-related stocks, Sumco Corp jumped 3.7% and Tokyo Electron 3.4%, while Advantest Corp gained 1.7%.
Index heavyweights also increased, with growth of 0.8% for retail trade and 1.3% for SoftBank Group Corp.
The increase was limited by worries about global demand after data from the Ministry of Finance show that Japanese exports fell for a third consecutive month in February, due to lower shipments of production equipment. semiconductors and cars.
The data also showed that exports to China, Japan's largest trading partner, grew 5.5 percent year-over-year, rebounding after dropping 17.4 percent in January.
However, trade with the world's second largest economy remained weak. Even taking into account the average effects of Lunar New Year holidays, shipments to China fell by 6.3% in January-February compared with the previous year.
"Concerns about weak Chinese demand have spread to other Asian regions, so unless the market confirms that demand has fallen in Asia, investors will remain cautious about risk," he said. Daiju Aoki, regional director of investments and chief economist of UBS. Wealth management in securities.
Defensive sectors outperformed in March with a 4.7% increase in real estate, a 2.7% increase in drug manufacturers and a 1.1% increase in utilities. The Nikkei has gained 0.9% since the beginning of the month.
"Investors will likely continue to buy defensive names until we see a sign of a resolution of the US-China trade war," said Yutaka Miura, Senior Technical Analyst at Mizuho Securities.
The larger Topix rose 0.4% to 1,609.40. (Report by Ayai Tomisawa edited by Darren Schuettler)
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