Nikkei seesaws down as trading houses, property duel

* Property shares slump after peer's collapse

* Trading houses surge on oil's climb, bolster Nikkei

* Bargain hunting below 13,000 providing support (Adds stocks, details)

By Elaine Lies

TOKYO, Aug 14 (Reuters) - Japan's Nikkei stock average lost 0.3 percent on Thursday, caught in a tug-of-war between property shares slumping on the collapse of peer Urban Corp 8868.T and trading houses surging on strong oil prices.

Banks slid in the wake of growing credit worries and bad news for their U.S. peers -- including a ratings cut on four major investment banks -- while exporters were shaky on worries about the economy as the details of Wednesday's Japanese gross domestic product data sank in. [ID:nT110289]

Oil jumped $3 a barrel on Wednesday after a U.S. government report showed declines in fuel and crude inventories, and continued to rise on Thursday CLc1, but despite this shipping firms powered higher after gains on a measure of freight costs.

"We're seeing a real surge in trading houses, which are rising both on higher oil prices and a sense that they'd become good value after heavy selling recently," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. He said the real estate sector was weak after Urban's failure, the biggest by a listed Japanese company in six years and the third by a mid-sized property firm in recent months, but he added that there were no signs of a major slide. [ID:nT92234]

"Certainly there's concern about property firms with smaller capitalisation, but the bigger developers are still relatively solid," he said. Market players said investors were trying to come to terms with Wednesday's GDP data, which despite coming in as predicted showed Japan's economy contracted in the second quarter at its sharpest rate in seven years.

"Even though the GDP matched expectations, the fact that it showed falling consumption and weaker exports has forced people to realise once again that things really aren't good with the economy," said Takashi Ushio, head of the investment strategy division of Marusan Securities.

The benchmark Nikkei lost 39.16 points to 12,983.89 while the broader Topix was down 0.6 percent to 1,239.40.

PROPERTY PUMMELLED, TRADERS TOUGH

Investors dumped stocks in Japanese property after Urban's collapse fanned fears others might follow.

Urban was the latest in a string of Japanese real estate firms to fold as banks rein in lending to small and medium-sized developers seen at risk as the the world's No.2 economy flirts with recession.

The real estate subindex .IRLTY.T shed 3.5 percent to become the biggest loser among the subindexes, with apartment developer Joint Co (8874.T) losing 18 percent to 196 yen and Creed Corp 8888.T shedding 11.8 percent to 75,100 yen.

Even larger firms suffered. Mitsubishi Estate Co Ltd (8802.T) slipped 3.3 percent to 2,350 yen and Mitsui Fudosan (8801.T), the largest property developer, shed 2.8 percent to 2,255 yen.