Nikkei slips as chip shares fall, but banks up

* Chip equipment shares hit after poor outlook for industry

* Sony tumbles after growth plan fails to reassure

* Falls limited as bank shares gain on short-covering

By Elaine Lies

TOKYO, Nov 20 (Reuters) - Japan's Nikkei stock average lost 0.5 percent on Friday as Advantest Corp (6857.T) and other chip-related shares slid, following falls by U.S. peers after a brokerage cut its growth outlook for the semiconductor industry. Shares of Sony Corp (6758.T) fell to their lowest in nearly four months after the electronics maker unveiled a new growth strategy that failed to reassure investors. [ID:nT265644] But losses were offset by gains in banking shares, battered recently by concerns about fundraising after top lender Mitsubishi UFJ Financial Group (8306.T) announced a massive share sale this week.

"It's possible that Japan may have anticipated Wall Street's fall a bit with the Nikkei losses on Thursday, but there are plenty of Japan-specific selling factors right now too, such as concerns about a rush of fundraising," said Kazuhiro Takahashi, an analyst at Daiwa Securities SMBC. [ID:nT141402]

The benchmark Nikkei .N225 is on track for its fourth consecutive negative week. It fell as much as 1.1 percent before recovering some ground to be down 42.40 points at 9,507.07.

The broader Topix .TOPX was flat at 838.05.

Wall Street shares took a hit on Thursday after disappointing economic data raised doubts about the strength of the economic recovery. [.N]

U.S. tech stocks were hammered after Bank of America-Merrill Lynch cut its 2010 growth outlook for the semiconductor industry on concerns about a rising inventory glut, and downgraded 10 stocks including Intel Corp (INTC.O). But some in the market were doubtful about how much this would affect Tokyo, noting that while the Nikkei had broken below key support at 9,500 it remained above its 200-day moving average, currently around 9,350.

TECH TROUBLES

"In many ways, the brokerage report is basically still just conjecture," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

He noted that Japanese chip gear makers were also possibly getting some support Semiconductor Equipment Association of Japan figures showing that orders for chip-making equipment in October totalled 65 billion yen ($729 million), down 4.1 percent from the previous month but up 66 percent from last year. [ID:nTFA006507] Advantest, which makes chip testing equipment, fell 1.7 percent to 2,055 yen, while Tokyo Electron (8035.T) lost 1.2 percent to 4,950 yen. Nikon Corp (7731.T), which makes steppers, shed 3.1 percent to 1,587 yen.

Sony, which is heading for its second straight annual loss, said on Thursday that it would launch 3D TVs and new networked products and services as part of a strategy to put it back on a growth track. [ID:nT265644]

But Sony also pushed back an elusive target of an operating profit margin of 5 percent to the financial year to March 2013. That target had been set by CEO Howard Stringer in 2005 for the year to March 2008.

Its shares fell as much as 3.8 percent before finding their feet and cutting losses to around 2 percent.

Falls in techs and oil-related shares, hit after oil prices CLc1 fell more than $2 on Thursday, were limited as bank shares gained on short-covering. [O/R]

Mitsubishi UFJ Financial Group rose 1.5 percent to 474 yen, while Japan's No. 3 bank, Sumitomo Mitsui Financial Group (8316.T) gained 3.5 percent and Mizuho Financial Group (8411.T) climbed 2.6 percent to 159 yen. (Editing by Rodney Joyce)