Nikkei extends losses, Sharp drops

TOKYO, June 13 (Reuters) The Nikkei extended losses to drop 2.25 percent on Tuesday as Canon Inc and other high-tech firms fell after declines in their U.S. peers while concerns over price competition sent flat-screen TV makers lower.

Sharp Corp. and Sony Corp lost ground after a downward earnings revision by rival LG. Philips LCD of South Korea, sparking worries about sliding prices and demand in the sector.

''Pricing has an impact on earnings ... although the makers which are manufacturing high-end products may be able to remain intact,'' Yumi Nishimura, manager, investment advisory section at Daiwa Securities SMBC Co Ltd.

Toru Otsuka, deputy general manager at Mizuho Investors Securities Co Ltd, said investors are losing confidence in the stock markets.

''Things are going bad to worse. People are now concerned about the poor stock market performance, which may put a dampener on the economy,'' he said.

The Nikkei is set to renew its lowest close since November initially marked on Thursday. The benchmark was 333.92 points lower at 14,499.09 as of 0431 GMT.

Takahiko Murai, general manager of equities at Nozomi Securities, said selling pressure is mounting and the Nikkei could break below 14,000.

''Investors are selling because if the U.S. Federal Reserve raises interest rates despite some signs of economic slowdown, that would lead to downward revisions of corporate earnings'' in the U.S. and Japan, he said.

The TOPIX index was down 2.24 percent at 1,477.05.

Canon, the world's largest digital camera maker, fell 2.6 percent to 7,480 yen and Advantest Corp, a maker of microchip testers, lost 3.1 percent to 10,580 yen.

Concerns about price competition in flat display panels sent Sharp, the world's biggest maker of liquid crystal display TVs, lower by 5.1 percent to 1,648 yen. Sony Corp also fell 3 percent to 4,780 yen.

Likewise, Matsushita Electric Industrial Co. Ltd. gave up 3.4 percent to 2,265 yen.

Steel shares, which have held relatively firm, were sold.

JFE Holdings Inc., the world's fourth largest steel maker, shed 5 percent to 4,220 yen. The stock gained 9 percent in May when the TOPIX lost 8 percent.

Nippon Steel Corp. also fell 2 percent to 384 yen.

The brokerage sector remained the worst performer on the Tokyo exchange's main board with Nomura Holdings Inc. declining 4.8 percent to 2,005 yen.

A notable stock was advertising firm Dentsu Inc., which has the rights to sell tickets and broadcasting rights for the World Cup soccer tournament in Germany. It fell 3.6 percent to 326,000 yen after the Japan team lost its opening match against Australia.

REUTERS KD BST1051