Nikkei hurt by fall in techs, wariness on earnings

                                
 * Nikkei loses 2 pct as techs and traders weigh
                                
 * Profit-taking emerging ahead of earnings season
                                
 * Earnings worry hits Kobe Steel, Kawasaki Kisen
                                
 By Elaine Lies
                                
 TOKYO, April 8 (Reuters) - Japan's Nikkei average lost 2
percent on Wednesday, with Kyocera Corp <6971.T> and other tech
firms down after losses by their U.S. peers as worries about
earnings prompted investors to take profits.
Trading firms fell after oil prices slipped, while shares in
companies with predictions of poor earnings lost ground as well.
Carmakers started the day in negative territory as
profit-taking kicked in after sharp rises, but Toyota Motor Corp
<7203.T> and several others later edged up as short-covering
emerged on a sense the sector is over the worst.
                                
 Market analysts said investors were moving to lock in profits
after the benchmark Nikkei <.N225> rose roughly 25 percent from
its March 10 bear market low by the close of trade on Tuesday.
                                
 "I think round one of the rally may be over. Though the
longer-term trend for the market is still up we seem to have run
out of fuel," said Katsuhiko Kodama, a senior strategist at Toyo
Securities.
                                
 "We're also heading into the earnings season, and while it's
been predicted to be bad and you can say things are factored in,
it's different when you actually have those figures before your
eyes."
                                
 Wall Street tumbled as the U.S. earnings season began, with
Alcoa Inc <AA.N> reporting its second consecutive quarterly loss
after the bell, igniting worries about another round of poor
profits and whether the recent rally is sustainable.
[ID:nN07485652] [.N]
                                
 Japan's earnings season begins in earnest on Thursday, when
retailers including Seven & I Holdings <3382.T> will announce
full-year results.
                                
 While many market players said the season could be rough, few
felt the Nikkei was in for sharp falls.
                                
 "There's no sign here of investors dumping stocks -- overseas
indicators are improving, as is the dollar's strength," said
Hideyuki Ishiguro, a supervisor in the investment advisory
department of Okasan Securities.
                                
 "Whereas in February and March I'd say that 10 percent of
Japanese investors were optimistic and 90 percent were
pessimistic, I think the proportions are now 30 to 70."
                                
 The Nikkei ended the morning down 174.22 points at 8,658.63
after earlier falling as low as 8,645.01, or more than 2 percent.
                                
 The broader Topix <.TOPX> lost 1.5 percent to 819.87.
                                
 CARMAKERS CHANGE GEARS
Carmakers, which had risen steadily for six straight trading
days, were initially hit by profit-taking that analysts had said
was overdue and dragged the broader market lower.
                                
 But several, including Toyota and Nissan Motor Co <7201.T>,
later turned positive on what Okasan's Ishiguro said was
bargain-hunting on a sense the sector was over the worst.
                                
 Honda Motor Co <7267.T> edged down 0.7 percent to 2,785 yen.
But Toyota rose 1.6 percent to 3,800 yen and Nissan climbed 2.6
percent to 476 yen.
                                
 Tech shares remained weak, though, after U.S. powerhouses
such as Apple <AAPL.O> lost ground.
                                
 Kyocera fell 4.1 percent to 6,490 yen and Canon Inc <7751.T>
lost 4.5 percent to 2,960 yen. Sony Corp <6758.T> shed 3.3
percent to 2,340 yen
                                
 U.S. crude oil futures fell nearly $1 to nearly $48 a barrel
on Wednesday, extending a 6.6 percent decline in the previous
three days, after the American Petroleum Institute reported a big
build in U.S. crude supplies. <CLc1>
                                
 The decline hit trading houses such as Mitsubishi Corp
<8058.T>, which fell 1.5 percent to 1,451 yen, while fellow
trader Mitsui & Co <8031.T> slipped 2.2 percent to 1,105 yen.
                                
 Oil and gas field developer Inpex <1605.T> shed 2.9 percent
to 707,000 yen.
In a sign that worry about earnings was hitting Japanese
shares as well, Kobe Steel <5406.T> lost 3.5 percent to 138 yen
after it downgraded its earnings estimate on Tuesday for the year
ended on March 31 to a net loss, citing an appraisal loss on
inventories as well as impairment charges on stockholdings and
fixed assets. [ID:nT00773]
                                
 Kawasaki Kisen Kaisha Ltd <9107.T> fell 3 percent to 353 yen
after the Nikkei business daily said on Wednesday that Japan's
third-largest shipping firm is expected to miss its forecast for
the just-ended financial year.
                                
 Trade picked up slightly on the Tokyo exchange's first
section, with 1.2 billion shares changing hands compared with
last week's morning average of 1.1 billion.
                                
 Declining shares outpaced advancing ones by more than 3 to 1.
 (Editing by Michael Watson)