Nikkei slips, hurt by worries over global economy

TOKYO, Sep 22 (Reuters) The Nikkei average fell 0.98 percent on Friday as concerns about a slowdown in the global economy prompted investors to take profits in Canon Inc. and other recent gainers.

The market brushed off a strong Japanese business survey as investors focused on other recent data which showed signs of weakness, analysts said.

''The earnings momentum may look good right now but some investors are expecting a slowdown in the Japanese economy,'' said Takahiko Murai, general manager of equities at Nozomi Securities.

Murai also said investors have been reshuffling their portfolios to whittle down exposure to shares of firms reliant on domestic demand.

The Nikkei fell 154.89 points to 15,679.34 as of 0110 GMT.

The broader TOPIX index fell 0.63 percent to 1,570.09.

With the Nikkei stuck in a narrow range, some players have built big positions in the futures market, making futures trading volatile, Murai said.

Tsutomu Yamada, a market analyst Kabu.com Securities Co., also said speculative selling has been spotted in the futures market ahead of book closings for the April-September first half, dragging the cash market down.

Canon fell 1.5 percent to 5,960 yen as investors grabbed profits after it hit the year's high of 6,070 yen on Tuesday.

Shin-Etsu Chemical Co. Ltd. snapped a six-day winning streak to fall 2.3 percent to 7,260 yen.

Meanwhile, bank shares rebounded as Goldman Sachs reiterated its ''attractive'' rating on the sector.

Mitsubishi UFJ Financial Group Inc., the world's biggest bank by assets, rose 1.4 percent to 1.48 million yen and Japan's No.2 Mizuho Financial Group Inc. added 0.3 percent to 902,000 yen.

A notable stock was Toho Zinc Co. Ltd., which rose 3.4 percent to 915 yen, becoming the biggest positive contributor to the Nikkei.

Japan's business survey index (BSI) on sentiment at large manufacturers was plus 12.7 for the July-September quarter compared with plus 1.4 in April-June, indicating companies were more confident about business conditions.

Reuters DKS VP0705