The stock market in Japan opened on a negative note as participants took Wall Street cues and pressed some sales across the board. However, with stocks finding reasonably strong support at lower levels, the market has rebounded into positive territory now.

The benchmark Nikkei 225 index, which had slipped to 8,676 earlier this morning, is currently trading at 8,766, up 39.65 points over its previous close.

Shares of Chugai Pharmaceutical Co. which produces influenza treatments, are in demand with fears of a swine flu pandemic sparking some strong buying in the drug stock. The stock is up 5.5 per cent at 1945 yen.

Takeda Pharmaceutical, Daiichi Sankyo and Dainippon Sumitomo Pharma are also trading with sharp gains.

Resource stock Inpex is trading higher. Construction, food and textiles stocks are trading mixed. Chemicals are mostly trading weak. Steel, machinery, real estate, shipbuilding and automobile stocks are also trading weak.

Retail sector witnesses stock specific action. Bank majors Shizuoka Bank, Chiba Bank, Chuo Mitsui Trust Holdings and Mitsubishi UFJ Financial Group Inc are trading marginally higher.

Among insurance stocks, Mitsui Sumitomo and T&D Holdings are trading higher. Sompo Japan Insurance and Tokio Marine Holdings are trading weak. Power and gas stocks are in demand.

Among the other markets in the Asia-Pacific region, Australia, New Zealand, Korea and Taiwan have bounced back after a weak start and are trading firm now. The Singapore market is trading marginally higher.

Nissan Motor Co. and Suntory Holdings Ltd., having operations in Mexico, are reported to have taken steps to deal with the outbreak of swine influenza there. Approximately 320 Japanese firms have bases in Mexico, according to the Japan External Trade Organization, with electronics manufacturers and others operating factories in the northwest, central and other parts of the nation.

Suntory has suspended work at its Mexican plant to prevent infection among employees, with all workers, including those from Japan, told to remain at home.

Among Japanese firms in Mexico, Nissan has the largest presence with two factories and a payroll of some 9,000 employees. It will send 5,000 masks to its company that oversees operations there, which is located in Mexico City, the epicenter of the outbreak.

Toto Ltd. and Hitachi Ltd. will repatriate the families of Japanese workers at local factories while Sanyo Electric Co. and Bridgestone Corp. have pulled the plug on business trips to the U.S., and Mitsui Chemicals Inc. has banned all overseas business travel.

Sales of masks and drugs to prevent infection have jumped at drugstores and elsewhere.

In a significant development, Japanese Prime Minister Taro Aso and Chinese Premier Wen Jiabao are expected to agree on a framework for cooperating on the development of next-generation cellular handsets and infrastructure at their summit meeting Wednesday in Beijing.

Japan's mobile services currently operate under 3G (third-generation) communications standards, while 2G (second-generation) technology predominates in China. As a result of the incompatibility, Japanese firms have lagged behind such rivals as Finnish cell phone maker Nokia Corp. and South Korea's Samsung Electronics Co. in penetrating the enormous Chinese market.

The agreement, involving both the public and private sectors, covers 3G and so-called 3.9G services slated to start in Japan as early as 2010. Some areas of China, including Beijing, began seeing 3G services this year, with major Chinese telecommunications firms projected to spend 6 trillion yen on related infrastructure by 2011.

Concerns over the economic impact of the swine flu kept Wall Street in negative terrain for the major part of the session on Monday. Healthcare stocks were seen attracting buyers.

Qualcomm announced it has entered into a settlement and multi-year patent agreement with Broadcom, which will result in the dismissal with prejudice of all litigation between the companies.

While Hugh Johnson, chief investment officer for Johnson Illington Advisors told RTTNews that traders used the swine flu scare as an excuse to take some money off the table, he warned that a full blown epidemic could lead to a 10 to 15 percent correction.

Although the flu does seem to be spreading, many doctors agree that the swine flu is no more panic worthy than any other breakout of the human flu during flu season.

President Barack Obama said Monday that the spreading swine flu is something that should raise the country's state of alert but should not be seen as a cause for alarm.

On the corporate front, Verizon reported first-quarter net income of $0.58 per share, compared to $0.57 per share in the year-ago period. Excluding special items, net income attributable to Verizon was $0.63 per share, compared to $0.61 per share in same quarter last year. On average, analysts expected the company to report earnings of $0.59 per share.

Whirlpool Corp. reported first quarter earnings of $0.91 per share, compared to $1.22 per share in the prior-year quarter. The company reported net sales of $3.57 billion, down from $4.61 billion in the year-ago period.

General Motors announced plans to restructure its operations in order to avoid the pitfalls of bankruptcy and the stock gained as much as 20%, its biggest single-session advance in more than a month. The company announced that it will cut 21,000 hourly jobs and reduce its U.S. dealer count by 42 percent by the end of 2010 under a revised viability plan. The company also plans to phase out its Pontiac brand and focus on its four core brands in the U.S.

Stock markets across the Asia-Pacific region closed mostly lower on Monday amid concerns about the impact of the swine flu outbreak. The Japanese market bucked the downtrend, however, with the Nikkei 255 Index edging up 0.2 percent.

Major European markets closed mixed. While the French CAC 40 Index closed down slightly, the U.K.'s FTSE 100 Index and the German DAX Index posted gains of 0.3 percent and 0.4 percent, respectively.

Trading on Tuesday could be impacted by the release of the S&P/Case-Shiller Composite Housing Index. Additionally, the Conference Board's consumer confidence index is also expected to be released.

On the earnings front, Pfizer, Office Depot, U.S. Steel and Bristol-Myers Squibb will report on Tuesday.

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