Nikkei hits 5-1/2yr-low, Sony dives on profit warning

*Nikkei falls 4.9 pct, hits 5-½ year low at one stage

*Nikkei has shed 7.4 pct so far this week

*Sony tumbles after profit warning, hitting other exporters (Updates with comment, stocks)

By Aiko Hayashi

TOKYO, Oct 24 (Reuters) - The Nikkei average slid 4.9 percent on Friday and fell at one point to its lowest level in over five years, as Sony Corp (6758.T) tumbled on a profit warning, dragging other exporters lower as worries about their earnings grew.

Sony plunged more than 12 percent after the company halved its annual operating profit forecast by 57 percent, to far below market estimates in its second downward revision this year, blaming a firmer yen and slowing demand for cameras and flat TVs. [ID:nT6579]

"The slowdown in the European and the U.S. economies is directly hitting the Japanese economy, which has depended on overseas demand for growth," said Takahiko Murai, general manager of equities at Nozomi Securities.

The Nikkei .N225 shed 413.99 points to end the morning at 8,046.99. At one stage, it slid as much as 5.3 percent to 8,012.96, its lowest point since May 2003.

The broader Topix .TOPX lost 4.4 percent to 833.78.

So far this week, the Nikkei has shed 7.4 percent while it is down about 47 percent since the beginning of this year.

But some market participants said that bargain hunting had emerged as the Nikkei neared the 8,000 level.

"Some investors think the market has already factored in the deterioration of the economy and corporate earnings, and stocks seem to be rather oversold," said Soichiro Monji, chief strategist at Daiwa SB Investments.

SONY WOES

Shares of Sony lost 12.2 percent to 2,015 yen.

The firm cut its operating profit forecast for the year through March to 200 billion yen ($2 billion), well short of the market consensus of 382 billion yen.

A stronger yen also helped push down exporters as it curbs overseas profits when they are brought home.

The euro fell 0.6 percent against the yen to 125.28 yen EURJPY=, above a six-year low of 123.13 yen hit on Thursday. The low-yielding yen has benefited as a safe-haven currency amid worries about global economies.

Canon Inc (7751.T) tumbled 6.4 percent to 2,855 yen, while Advantest Corp (6857.T), the world's No.1 maker of chip testers, lost 9.3 percent to 1,182 yen and Kyocera Corp (6971.T) shed 5.6 percent to 5,530 yen,

Toyota Motor Corp (7203.T) dropped 3.5 percent to 3,300 yen after the Mainichi newspaper reported it would likely book an operating loss in North America for April-September in real terms excluding the impact of a gain in interest rate swaps.

A company source told Reuters earlier this month that Toyota was considering cutting its earnings outlook for the year to next March. [ID:nT352215] It will announce results on Nov. 6.

Trade was light on the Tokyo exchange's first section, with 970 million shares changing hands, compared with last week's morning average of 1.1 billion.

Declining stocks outpaced advancing ones by 6 to 1. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)