*Nikkei down 1.4 pct after record gains
*Exporters, automakers down on gloomy economy, stronger yen
*Company earnings become focus, weigh on market
*Topix down 2.4 percent
(Adds stocks, details)
By Elaine Lies
TOKYO, Oct 15 (Reuters) - Japan's Nikkei average shed 1.4
percent on Wednesday after making record gains a day earlier,
with worry about the global economy and company earnings weighing
on the market along with a stronger yen.
Shares of Elpida Memory <6665.T> were overwhelmed with sell
orders after the chipmaker said it would post a much bigger loss
than expected, while shipping firms tumbled after a key freight
index logged a big fall. []
Toyota Motor Co <7203.T> and other automakers slid on the
gloomy outlook for U.S. car sales. Mazda Motor <7261.T> tumbled
nearly 10 percent after a report that it has scrapped plans to
build a second U.S. factory. []
"While the financial system crisis appears to be heading in a
positive direction, the economy appears to be increasingly bad,
and this is raising worries about company earnings," said Hiroaki
Osakabe, a fund manager at Chibagin Asset Management.
"We still don't know how much these might be hit."
U.S. stocks fell on Tuesday on fears that the global economy
may not avert recession, with technology and consumer companies
hit hard although losses were offset slightly by
better-than-expected results from Intel <INTC.O> after the
closing bell. []
The benchmark Nikkei <> shed 136.35 points to 9,311.22
after rising more than 14 percent on Tuesday for its biggest
one-day gain ever.
The broader Topix <> lost 2.4 percent to 933.52.
HARD TIMES AHEAD
Some Tokyo market participants said that while the worst
might be over for now, tough times ahead were likely, making
further substantial gains difficult.
"Attention in the market is now shifting more to the economy
and earnings, especially with U.S. bank earnings coming up soon.
The market will really be watching those," said Katsuhiko Kodama,
senior strategist at Toyo Securities.
"It appears the Nikkei may have hit the bottom, but
recovering to 10,000 may be hard for now."
Despite the Nikkei's Tuesday surge, it still remains down
17.3 percent on the month.
Among the biggest drags on the Nikkei 225 by volume weight
were automakers, with Honda Motor <7267.T> down 6 percent at
2,335 yen and Toyota shedding 4.6 percent to 3,550 yen.
Sony Corp <6758.T> slipped 7.4 percent to 2,580 yen and Canon
Inc <7751.T> was down 1.4 percent at 3,550 yen after the yen
gained broadly on global economic worries.
The dollar retreated to around 101.27 from a Tuesday high
above 103 yen <JPY=>.
Elpida was hit by sell orders indicated at 1,183 yen after it
said it would likely post a 40 billion yen ($392 million)
half-year operating loss due to price cuts amid a slowing economy
-- a much bigger loss than the market had expected.
Shippers sank as freight rates extended their tumble, with
the Baltic Exchange's chief sea freight index for global raw
materials trade <.BADI> down more than 8 percent on Tuesday.
Mitsui OSK Lines Ltd <9104.T> dropped 10 percent to 606 yen
and Kawasaki Kisen Kaisha Ltd <9107.T> lost 8.8 percent to 454
yen. Nippon Yusen <9101.T> shed 8.1 percent to 489 yen.
Trade was light on the Tokyo exchange's first section, with
1.07 billion shares changing hands, compared with last week's
morning average of 1.29 billion.
Declining stocks outpaced advancing ones by more than 2 to 1.
(Reporting by Elaine Lies; Editing by Edwina Gibbs)
