TOKYO (AFX-ASIA) - Share prices closed lower on further profit-taking following the continued falls on Wall Street overnight, dealers said. The market was also pressured by fears over fresh terrorist attacks in the US, tensions between India and Pakistan over Kashmir and the continued violence in the Middle East, they added. The Nikkei 225 index closed down 82.97 points or 0.70 pct at 11,770.03, off a low of 11,680.58. Volume was estimated at 804 mln shares. The Topix index was down 4.45 points at 1,121.30 and the Nikkei 300 index was down 0.75 points at 222.35. Decliners led gainers 831 to 518, with 138 stocks unchanged. The Nikkei June contract was down 80 points at 11,760 on the Osaka Securities Exchange and at 11,770 on the SGX. Century Securities senior strategist Morihiko Ida said the local equity market has entered a correction phase following recent foreign investor-led gains. "Today, investors reacted negatively to the overnight fall on Wall Street, as well as to the local equity market becoming top-heavy at the 12,000 points level," Ida said. Mizuho Investors Securities strategist Motoyoshi Uchida agreed. "While gains in high-techs are much needed to see a breakthrough in the Nikkei 225 index to over the 12,000 point level, they are not likely to emerge as the core target for investment, given the highly fragile movement on Wall Street," he said. "But, the most recent round of correction in high-techs is already over. If Wall Street can regain some positive momentum, Japanese high-techs may enjoy a strong rebound." The continued firm performance of the yen also pressured the market, triggering modest selling among major exporters such as automakers, dealers said. In addition, receding positive expectations for fresh policy action by the government also discouraged investors from re-testing the psychologically important 12,000 point level, they said. However, analysts believe the current correction will not be sustained. "I think the market has entered a correction phase. But, I expect the correction will not last long, and that the local equity market will be well-supported by bargain-hunting," Century's Ida said. In addition, expectations for further improvement in the domestic economy will continue to support the downside ahead of the release in the next week of first quarter to June GDP data for Japan, dealers said. Bank of Japan governor Masaru Hayami said today that Japan is now about to experience the third economic recovery phase since the burst of the bubble economy in the late 1980's. Among domestic demand related stocks, utilities were lower on profit-taking, with TEPCO down 35 yen at 2,600, Tokyo Gas 7 lower at 341, and Osaka Gas down 8 at 296. "Because of the recent active buying, particularly from foreign investors, domestic demand related stocks were pressured slightly by profit-taking. But this buying interest will continue for the time being," Ida said. Auto stocks were lower, pressured by the firmer yen, with Honda 70 lower at 5,450, Mitsubishi Motors down 14 at 402, Nissan off 22 at 931 and Suzuki off 26 at 1,600. High-techs were mixed, with Rohm down 50 at 18,800 and Tokyo Electron off 20 at 8,590, while Advantest was up 60 at 8,800 and Kyocera up 20 at 9,850. Consumer electronics equipment discount shop operators were higher ahead of the start of the World Cup this weekend, with Kojima rising 70 to 1,053 and Yamada up 430 at 10,900. "Unless the Japanese team goes to the final round, this event is not likely to have a broadly-based positive impact on the market," Uchida said. Banks were higher, with Mizuho Holdings gaining 12,000 to 309,000, MTFG rising 15,000 to 1.0 mln yen and SMBC 29 higher at 703.