Tokyo's Nikkei slid one percent by late afternoon on Tuesday after weak Japanese output data spurred broad-based selling, with tech stocks such as NEC Electronics Corp. <6723.T> also hit by worries about Intel Corp's earnings. Steel stocks were among the few gainers, climbing after JFE Holdings Inc. <5411.T>, the nation's second-largest steel maker, lifted its full-year profit forecast and a newspaper said bigger rival Nippon Steel Corp <5401.T> would do the same. But traders said despite overall weakness the market was holding up well given that the broad TOPIX index <.TOPX> of all first-section shares has risen for 10 consecutive sessions. "Industrial output was not good, and with New York falling like it did, it was natural that the market peaked," said Ken Masuda, a senior dealer in equities at Shinko Securities. "All in all, it's a fairly reasonable market. After a 10-day run for the TOPIX, we were due for a breather," he said. By 0512 GMT, the benchmark Nikkei average <.N225> had lost 0.97 percent or 108.88 points to 11,075.65. The broader TOPIX fell 0.77 percent to 1,129.22 or 8.80 points.
Government figures released before the opening bell showed Japanese industrial production was flat in July compared with June, failing to meet the median forecast of a 1.0 percent gain in a survey of economists. Selling also hit banks after a newspaper said Sumitomo Mitsui Financial Group Inc. <8316.T> is prepared to launch a hostile takeover bid for UFJ Holdings Inc. <8307.T>, which is already in merger talks with Mitsubishi Tokyo Financial Group Inc. <8306.T>, if UFJ rejects its existing merger offer. Worries that tech bellwether Intel could cut its revenue forecast pushed U.S. tech issues lower and spilled over into Tokyo. NEC Electronics, the world's eighth largest chip maker, lost 2.83 percent to 5,490 yen. Among steel stocks JFE jumped 2.77 percent to 2,970 yen while Nippon Steel rose 2.45 percent to 251.////