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TOKYO, May 22 (Reuters) The Nikkei average gave up its earlier gains and inched down 0.31 percent on Monday as lower oil prices sent INPEX Holdings Inc. and other resource-related shares lower.

Steel stocks advanced after Arcelor said on Sunday it was willing to study Mittal Steel's improved takeover offer and business plan to create a global steel giant, fuelling expectations for a further shake-up in the market.

Kenichi Azuma, equity strategist at Cosmo Securities Co Ltd, said lingering concerns about possible hikes in U.S. interest rates and their impact on U.S. consumption are weighing on the market.

''There are concerns about U.S. consumption amid uncertainty about how long and how far U.S. interest rates will go up,'' he said.

But Teruhisa Ishikawa, manager at investment information department, said the market should be low enough to lure buyers.

''Investors are ready to come in the market but they cannot find reasons to do so,'' he said.

The Nikkei average lost 49.53 points at 16,105.92 as of 0425 GMT.

The benchmark has given up nearly 1,000 points in the past two weeks.

The TOPIX index gained 0.09 percent at 1,640.10.

Shares of energy-related firms lose ground after U.S. crude futures settled nearly $1 lower on Friday, hit by a broad sell-off in commodities markets.

INPEX Holdings Inc., Japan's biggest oil explorer, lost 4 percent at 960,000 yen and Nippon Mining Holdings Inc., which includes oil refiner Japan Energy among its holdings, fell 5.9 percent to 969 yen.

In the steel sector, shares were lifted on expectations for a consolidation in the industry.

Nippon Steel Corp, the world's third largest steel maker, was up 1.7 percent at 431 yen while fourth ranked JFE Holdings Inc. gained 1.9 percent to 4,780 yen, after earlier hitting its all-time high of 4,810 yen.

On the technology sector, Sony Corp. and KDDI Corp. rose after KDDI, Japan's second-largest telecoms operator, said on Monday it plans to launch Walkman brand music phones made by Sony Ericsson in Japan in June.

Sony gained 3.5 percent to 5,260 yen and KDDI rang up 3.9 percent to 755,000 yen.

A close eye is on bank shares as Mitsubishi UFJ Financial Group Inc., Japan's biggest banking group, and No. 2 Mizuho Financial Group Inc. are among companies to announce full-year earnings later in the day.

Mitsubishi UFJ was unchanged at 1.67 million yen and Mizuho added 1.6 percent to 957,000 yen.

Investors flocked to some food shares with strong earnings outlooks.

Nippon Suisan Kaisha Ltd. jumped 11.3 percent to 590 yen after the seafood processing company said on Friday it would aim for 17 billion yen in recurring profit for the year to March 2007, up 43 percent from a year earlier.

Nippon Meat Packers Inc. gained 4.5 percent to 1,394 yen after the meat processor firm on Friday posted a lower profit for the year ended in March but forecast a rebound for the current year.

REUTERS CH VA VV1118