* Nikkei falls 2.6 pct, Topix sheds 2.5 pct
* Nikon, Panasonic slide on bleak earnings outlooks
* MSCI reshuffled stocks stand out, NEC Elec tumbles
By Aiko Hayashi
TOKYO, May 14 (Reuters) - Japan's Nikkei average fell to its
lowest point in two weeks on Thursday as exporters slid on a
firmer yen and renewed concerns about the U.S. economy, while
Nikon Corp <7731.T> tumbled after it forecast its first annual
operating loss in 11 years.
Panasonic Corp <6752.T> dropped after a newspaper said the
consumer electronics maker is likely to post a net loss of more
than $1.1 billion this financial year. []
Stocks affected by a reshuffle in the MSCI Barra's Japan
Index <.MSCIJP> were actively traded. Chipmaker NEC Electronics
<6723.T> plunged more than 11 percent after being dropped and car
battery maker GS Yuasa Corp <6674.T> gained after being included.
Sales at U.S. retailers fell for a second straight month in
April, breaking a string of more upbeat reports that had
suggested the economic slump was abating and weighing on the Dow
Jones industrial average <>, which fell 2.2 percent.
[]
"U.S. retail data proved the market had been too optimistic
about a recovery in the economy," said Takahiko Murai, general
manager of equities at Nozomi Securities.
"It has become hard to buy stocks sensitive to the economic
cycle such as exporters or materials companies," he said.
The benchmark Nikkei <> shed 2.6 percent or 237.90
points to 9,102.59 by midday after earlier touching its lowest
since May 1.
It gained 0.5 percent the previous day to inch back towards a
six-month closing high struck earlier in the week.
The broader Topix <> slid 2.5 percent to 866.30.
NIKON DROPS, NEC ELEC TUMBLES
Nikon, a Japanese camera and precision equipment maker, sank
7.4 percent to 1,371 yen after forecasting an annual operating
loss as chipmakers slash spending, although the loss was smaller
than market expectations. []
Panasonic declined 4.1 percent to 1,394 yen.
NEC Electronics tumbled 11.4 percent to 917 yen, while GS
Yuasa Corp <6674.T> added 2.4 percent to 698 yen.
Consumer loan firm Takefuji Corp <8564.T>, which was also
dropped from the MSCI Japan Index, lost 5.1 percent to 578 yen.
Exporters fell as investors fret over a stronger yen, which
curbs their profits when repatriated. The dollar fell as low as
95.14 yen <JPY=> on trading platform EBS, its lowest since March
20. []
Toyota Motor Corp <7203.T>, the world's biggest automaker,
skidded 3.6 percent to 3,530 yen, while Canon Inc <7751.T>
declined 3.6 percent to 3,190 yen.
Among stocks that gained, shares of Nippon Telegraph and
Telephone Corp <9432.T> gained 2.6 percent to 3,990 yen after it
reported an operating profit of 1.1 trillion yen ($11.5 billion)
for the financial year ended March 31.
Along with GS Yuasa, Rinnai Corp <5947.T>, a maker of gas
appliances, and McDonald's Holdings Co (Japan) <2702.Q> gained
after their inclusion in the MSCI Barra's Japan Index.
Rinnai shot up 6.6 percent to 4,190 yen and McDonald's
Holdings added 3.4 percent to 1,902 yen.
Trade was subdued on the Tokyo stock exchange's first
section, with 1.1 billion shares changing hands, below last
week's morning average of 1.3 billion.
Declining stocks outnumbered advancing ones by nearly 5 to 1.
(Editing by Joseph Radford)
