* Nikkei sinks below support at 9,612.51
* Nikkei's mid-term support seen book value at 8,800-analyst
* Strong aftershocks keep investors on edge -fund manager
* Selling in blue-chip shares as earnings worries weigh
* Oil, gas stocks track commodities decline
By Ayai Tomisawa and Antoni Slodkowski
TOKYO, April 12 (Reuters) - Japan's Nikkei average fell
nearly 2 percent, dropping for a second straight day on Tuesday,
on growing worries that the impact of the March 11 earthquake
may be more severe than hoped for and as Japan put its nuclear
crisis on par with Chernobyl.
Car and electronics makers were sold off while declines in
oil prices spurred profit-taking in energy-related shares,
pushing the Nikkei stock average below key support of 9,612.51,
where April options settled last week.
"The market had until now thought that the quake's impact
would be felt most severely in the April-June quarter, but it
seems it may drag on for at least another quarter, and will keep
the market depressed for much longer," said Hideo Arimura, a
senior fund manager at Mizuho Asset Management.
Underscoring those worries, Japan's economics minister
warned on Tuesday that the economic damage from last month's
earthquake and tsunami is likely to be worse than initially
thought as power shortages will crimp factory output and disrupt
supply chains.
Meanwhile, Toyota warned late on Monday that the uncertain
supply of parts could threaten its output of vehicles through
July, the latest sign of trouble for the global auto industry
stemming from the earthquake.[]
The world's largest carmaker fell in line with most other
manufacturers and blue-chip exporters, shedding 1.1 percent to
3,225 yen, while Sony Corp slipped 2.8 percent to 2,504
yen.
U.S. crude oil futures extended losses by more
than $2 on Tuesday on concern high fuel prices will hurt demand
and as Goldman Sachs advised investors to lock in trading
profits after a rally this year in many commodity markets.
U.S. crude for May delivery <CLc1> hit a session low of
$107.87, or down $2.05 a barrel. []
Trading volumes remained thin as the market awaited U.S.
corporate earnings, which may yield clues about the damage to
the global supply chain and after that Japanese earnings reports
in late April and early May.
In early afternoon trade, 1.47 billion shares changed hands
on the Tokyo bourse's first section, suggesting that Tuesday's
total volume could be on par with the previous day's levels,
which were the lowest since the quake and third-lowest in 2011.
The Nikkei fell 1.8 percent or 174.95 points to
9,544.75, after hitting an intraday low level at 9513.27 soon
after the afternoon market opened. The broader Topix
index dropped 1.7 percent to 838.08.
Immediate support is seen at 9,500 -- a low hit during a
massive post-quake selloff a month ago.
Seiichiro Iwasawa, chief strategist at Nomura Securities,
said that the Nikkei should be supported above 8,800 mid-term,
the book value of the benchmark, even if more negative news hit.
OIL STOCKS SOLD
Shares of Tokyo Electric Power Co , the operator of
the stricken Fukushima Daiichi nuclear power plant, fell 0.2
percent in volatile, heavy trade to 499 yen although it had
climbed as high as 539 yen at one point after Vice Trade
Minister Tadahiro Matsushita said he was not considering
nationalisation of the company.
Engineers put out a fire at the plant which
started after another major aftershock rocked eastern Japan,
swaying buildings in central Tokyo and closing Narita airport
runways.[][]
There has been many large aftershocks since Monday,
including one on Tuesday afternoon.
"I feel the market is being undermined by a series of
aftershocks that we've been experiencing recently," said Ryosuke
Okazaki, chief investment officer at ITC Investment Partners
Corp.
Shares of oil and gas developers Inpex Corp and
Japan Petroleum Exploration Co (Japex) succumbed to
profit-taking as oil extended the previous day's decline amid
mounting concerns that rising fuel costs will erode demand and
threaten the global economic recovery.
Inpex, Japan's biggest oil and gas developer and one of the
biggest post-quake outperformers -- up 13 percent since the
quake -- fell 5.2 percent to 620,000 yen. Japex lost 3.9 percent
to 3,995 yen.
Analysts said that while falling commodities prices will
pressure energy stocks, in the long run they will also help to
ease worries over the impact of rising raw material costs on
input costs and margins, providing some support to the market.
(Additional reporting by Chikafumi Hodo; Editing by Edwina
Gibbs)
