*Nikkei down 1.5 pct in a broad sell-off after Monday's rally
*Investors lock in profits amid uncertainty
*Shippers decline sharply after key index extends losses
(Adds stocks and comments)
By Taiga Uranaka
TOKYO, Sept 9 (Reuters) - The Nikkei average fell 1.5 percent
on Tuesday, as investors booked profits after a sharp rally the
previous day on the U.S. government's bailout of top mortgage
firms, and amid continued uncertainty over the health of the
global economy.
Japan's top banks fell back from double-digit percentage
gains seen on Monday, and shippers such as Kawasaki Kisen Kaisha
Ltd <9107.T> declined sharply after a key freight index fell to
its lowest point in more than a year.
Hitachi Construction Machinery <6305.T> and ferronickel
producer Pacific Metals <5541.T> jumped after they were chosen to
join the benchmark index in a regular reshuffle.
Market participants said investors still have much to worry
about, including earnings from U.S. investment banks, such as
Lehman Brothers <LEH.N>.
"Today is the day after the party," Fujio Ando, senior
managing director at Chibagin Asset Management.
"In hindsight, yesterday's rally was merely caused by the
buying back of oversold shares."
The benchmark Nikkei <> ended the morning down 185.43
points at 12,439.03. The index had jumped 3.4 percent on Monday
The broader Topix <> lost 1.8 percent to 1,194.97.
"The U.S. rescue plan has prevented a worst-case scenario but
when you give it some thought, the situation has not changed. It
does not help improve U.S. employment figures, for instance,"
said Fumiyuki Nakanishi, manager of investment information at
SMBC Friend Securities.
The Nikkei failed to end above a key technical ceiling around
12,620 on Monday, suggesting to chart watchers that the market
lacked momentum to sustain gains, he said.
BANKS SLIP
Top lender Mitsubishi UFJ Financial Group <8306.T> declined
2.8 percent to 826 yen, and No.2 Mizuho Financial Group <8411.T>
slid 3 percent to 449,000 yen. Both had risen by their daily
limits on Monday.
Shipper Kawasaki Kisen Kaisha Ltd <9107.T> lost 6.1 percent
to 657 yen and rival Mitsui OSK fell 5.1 percent to 1,100 yen.
A key freight index <.BADI> fell 3 percent to hit its lowest
since late June 2007, pointing a fall in sea cargo traffic,
another indicator of a slowing global economy.
Exporters also faced a broad sell-off, with Honda Motor Co
Ltd <7267.T> falling 3 percent to 3,540 yen, becoming the biggest
drag on the Nikkei.
Hitachi Construction Machinery rose 4.3 percent to 2,425 yen
and ferronickel producer Pacific Metals jumped 3.2 percent to 675
yen after the publisher of Japan's benchmark stock average said
the two firms would join the Nikkei 225 average <> in a
reshuffle. []
The Nikkei Inc also said it would remove builder Kumagai Gumi
<1861.T> and chemical maker Toagosei <4045.T> in the reshuffle on
Oct. 1 due to a decline in liquidity in those stocks. Kumagai
Gumi was down 5.5 percent at 52 yen and Toagosei tumbled 10.8
percent to 357 yen.
Trade slowed on the Tokyo exchange's first section, with 798
million shares changing hands, compared with last week's morning
average of 859 million.
Declining stocks outpaced advancing ones by more than 3 to 1.
(Editing by Edwina Gibbs)
