Nikkei down 0.9 pct as Inpex, exporters decline

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By Aiko Hayashi

TOKYO, June 20 (Reuters) - Japan's Nikkei stock average slipped 0.9 percent on Friday, dented by Inpex Holdings (1605.T) and other oil-related shares as oil prices fell after China said it will raise domestic fuel prices.

Market participants said investors locked in profits in Japanese stocks amid uncertainty about the U.S. economy and after the shares recently found more favour than European and U.S. stocks.

A fall in recent gainer Kyocera Corp (6971.T) and other exporters helped to drag down the overall market.

Oil above $130 is still high and moves to lift prices of oil-related products in China and other emerging countries seem negative for the market, said Soichiro Monji, chief strategist of the equity management department at Daiwa SB Investments.

"They can no longer maintain the prices of those products, leading consumers to refrain from using cars and to avoid using electricity," he said. "In other words, it could lead to an economic slowdown."

"Also, Japanese stocks have been solid compared to overseas markets and a considerable amount of profit-taking is in store."

The benchmark Nikkei .N225 ended the morning session down 132.74 points at 13,997.43, extending losses after a 2.2 percent decline on Thursday.

The broader Topix shed 0.9 percent to 1,363.02.

"The fall is due to the weekend, and also because investors are concerned about how the U.S. market will do today as its previous day's rebound was still weak," said Yutaka Miura, deputy manager of the equity information department at Shinko Securities.

U.S. crude was down 13 cents at $131.86 a barrel CLc1. It plunged nearly $5 on Thursday as China's surprise move to increase fuel prices lead to worries about a curb in demand from the world's second largest consumer.

INPEX, EXPORTERS DOWN

Inpex, the country's biggest oil and gas explorer, slipped 2.2 percent to 1.31 million yen and Nippon Oil (5001.T), Japan's largest oil distributor, fell 1.5 percent to 708 yen.

Exporters fell, with Kyocera down 2.3 percent at 10,500 yen and Sony Corp (6758.T) shedding 1.3 percent to 5,150 yen.

Sumitomo Mitsui Financial Group (8316.T) fell 0.7 percent to 890,000 yen even after sources familiar with the matter said that Japan's third-largest bank is considering investing about 100 billion yen ($926 million) in British bank Barclays (BARC.L). [ID:nT157641]