Nikkei falls 0.8 pct as Internet stocks hit

TOKYO, Sep 20 (Reuters) The Nikkei average fell 0.82 per cent on Wednesday as a profit warning from Yahoo Inc. hit Internet stocks including Softbank Corp. and also stoked concerns about demand in the United States, hurting shares of exporters such as Toyota Motor Corp.

The market took a military coup in Thailand in its stride and also paid little attention to the Japanese ruling Liberal Democratic Party leadership election later in the day as government spokesman Shinzo Abe is widely expected to win and be elected new prime minister next week.

''It's all about the Yahoo news,'' said Norihiro Fujito, general manager at Mitsubishi UFJ Securities' investment research and information division.

''Investors are dumping Internet stocks. The market has been somewhat aware that the Web market has matured, but this news has dashed any illusion of growth,'' he said.

The Nikkei was down 129.53 points at 15,744.75 as of 0057 GMT. The broader TOPIX index was 0.97 percent lower at 1,576.61.

Internet and communications conglomerate Softbank dropped 2.1 percent to 2,095 yen after Yahoo Inc. warned weaker advertising revenue would hurt its third quarter.

Yahoo Japan Corp., the nation's most popular website, slid 3.3 percent to 40,100 yen. Internet shopping mall operator Rakuten Inc. sank 5.9 percent to 46,900 yen.

Toyota, the world's second-biggest auto maker, was down 1.1 percent at 6,210 yen. Rival Honda Motor Co. Ltd. lost 1.8 percent to 3,790 yen.

Yutaka Miura, deputy manager at Shinko Securities' equity information department, said the coup in Thailand would have little immediate impact on the market.

''I haven't heard so far of any problems at Japanese companies which have offices and factories in Thailand. Also, I understand there has been political uncertainty there for a while,'' he said.

REUTERS DKS BST0656