(Updates with stocks, details)
By Aiko Hayashi
TOKYO, May 28 (Reuters) - Japan's Nikkei stock average
slipped 0.4 percent on Wednesday as oil's fall from record highs
pressured commodity-linked shares such as trading firm Mitsubishi
Corp <8058.T>.
A notable exception to the overall fall was Oki Electric
Industry Co <6703.T>, which shot up 7.1 percent to 225 yen, after
the Nikkei business daily said that Rohm Co <6963.OS> plans to
buy the semiconductor operations of Oki for about 100 billion yen
($959 million).
Kenichi Hirano, operating officer at Tachibana Securities,
said the market had opened higher after a solid finish by U.S.
stocks, but it lacked energy to pursue further gins, with the
benchmark Nikkei already topping the key 25-day moving average on
Tuesday.
"Now the market is moving on delicate demand and supply
conditions, such as relations between bonds and stocks, and
currencies and stocks," he said.
The benchmark Nikkei average <> fell 56.78 points to end
the morning session at 13,836.53, after advancing 1.5 percent the
previous day.
The broader Topix index <> shed 0.5 percent or 7.00
points to 1,361.25.
Oil extended losses on Wednesday after falling $4 to $128 a
barrel the previous day, dented by the stronger dollar and
concerns moves to cut Asian fuel subsidies could hurt demand
growth. []
"A fall in oil prices is bad news for trading houses and
resource-related stocks, but stabilising oil prices are positive
for the overall market," saidKoichi Ogawa, chief portfolio
manager at Daiwa SB Investments.
"Still, the Japanese market is in a consolidation stage in
the short-term," he said.
The benchmark Nikkei has gained nearly 20 percent since a
year-low hit in mid-March.
TRADING HOUSES HURT
Mitsubishi Corp lost 2.9 percent to 3,640 yen and Mitsui & Co
<8031.T> declined 2.6 percent to 2,580 yen, as Japan's top
trading firms invest heavily in overseas oil fields and mines.
Nippon Oil <5001.T>, Japan's largest oil distributor, shed
3.7 percent to 759 yen and oil explorer Inpex Holdings <1605.T>
lost 3.1 percent to 1.27 million yen.
Shares of Rohm slipped 1.1 percent to 6,540 yen.
The deal between Rohm and Oki Electric would create Japan's
seventh-largest semiconductor maker in terms of sales and would
mark the first major realignment in Japan's chip industry since
Hitachi Ltd <6501.T> and Mitsubishi Electric Corp <6503.T> merged
their system chip operations in 2003, the Nikkei newspaper said.
[]
The market received some support from high-tech exporters on
a softer yen and after a sharp drop in oil prices boosted
investor confidence about consumer and business spending on Wall
Street.
The tech-heavy Nasdaq Composite Index <> ended up 1.50
percent on Tuesday.
Tokyo Electron Ltd <8035.T>, the world's second-largest
semiconductor equipment maker, gained 3.5 percent to 6,900 yen
and Advantest Corp <6857.T>, the world's largest maker of
microchip testers, climbed 1.4 percent to 2,620 yen.
The dollar steadied against the Japanese currency at 104.26
yen <JPY=>. Investors had fretted over a stronger yen as it dents
exporters' overseas profits when they are brought back home.
Trade was light on the Tokyo exchange's first section, with
888 million shares changing hands, compared with last week's
morning average of 1.1 billion.
Declining stocks beat advancers by more than 2 to 1.
(Editing by Brent Kininmont)
