Nikkei off last week's 8-mth high, chipmakers fall

* Chip shares drag Nikkei lower

* Property shares gain on sector upgrade

* SMFG slides after report on planned share issue

By Elaine Lies

TOKYO, June 15 (Reuters) - Japan's Nikkei stock average fell nearly 1 percent on Monday, dragged lower by chipmakers after disappointing guidance from a U.S. peer and as investors booked profits after the Nikkei hit an eight-month high last week.

But falls were checked by gains in property developers such as Sumitomo Realty & Development (8830.T) after Daiwa Institute of Research hiked its rating on the real estate sector to "neutral" from "underweight", citing ongoing improvements in credit markets and global confidence.

The underlying trend still seems to be towards higher share prices, said Tsutomu Yamada, market analyst at Kabu.com Securities.

"Investors are buying due to the improvement in the global economy, and it is as if stock markets are rising in unison," Yamada said.

The Nikkei, which closed above 10,000 on Friday for the first time in eight months, could rise towards 10,800 over the next month and test resistance at the top of the cloud on weekly Ichimoku charts, Yamada said.

The benchmark Nikkei .N225 shed 96.15 points to 10,039.67 after closing at 10,135.82 on Friday, its highest close since early October.

The broader Topix fell 0.4 percent to 946.82 .

"We've verified that markets have bottomed out but we have yet to see what sort of form the recovery will take and we need clear proof that it will continue," said Masayoshi Okamoto, head of trading at Jujiya Securities.

With the Nikkei having hit 10,000, many investors want to book profits before this week's U.S. indicators, he added.

U.S. May housing starts, producer prices and industrial production are set to be released on Tuesday, with consumer prices coming out on Wednesday.

Markets will also be watching a summit of leaders from Russia, China, India and Brazil -- the producers of 15 percent of global output -- to be held in Russia on Tuesday. [ID:nLB596662]

CHIPS CRUMBLE, PROPERTY POWERFUL