Nikkei falls 1 pct, slips below 16,000

TOKYO, Nov 13 (Reuters) The Nikkei slipped 1 per cent on Monday, falling below 16,000 for the first time in more than six weeks as investors sold shares of Sumitomo Mitsui Financial Group Inc., Fast Retailing Co Ltd and other firms sensitive to domestic demand on concerns that economic growth is slowing.

Shares of Fanuc Ltd and other machinery stocks extended losses after Japan's September machinery orders came in below expectations on Friday.

The machinery orders data, a key gauge of capital spending, increased concerns that Japan's third-quarter gross domestic product data, due on Tuesday, could also disappoint the market.

''Right now it looks as if the companies that are making money are making it overseas,'' said Hideyuki Suzuki, investment information manager at SBI Securities. ''Companies that rely on the domestic economy are not looking as strong.'' But investors were also holding back from leading exporters such as Toyota Motor Corp, Suzuki said.

''You can't just buy blue-chip exporters every day.... For the market to really advance, a broader range of stocks need to be bought,'' he said.

The Nikkei finished the morning down 1.02 per cent at 15,948.20 after earlier hitting its lowest since late September.

The broader TOPIX was down 1.26 percent at 1,561.43.

Sumitomo Mitsui, Japan's third-largest lender, fell 1.7 per cent to 1.18 million yen. Fast Retailing, the operator of the ''Uniqlo'' chain of casual clothing stores, declined 2.5 per cent to 9,970 yen, becoming the biggest contributor to the Nikkei's decline.

Fanuc, a maker of industrial robots, fell 1.6 per cent to 10,280 yen, adding to a decline of 0.4 per cent on Friday when it slipped after the machinery data.

The data showed that core private-sector machinery orders fell 7.4 per cent in September from the previous month on a seasonally adjusted basis, below economists' forecasts for a rise of 1.9 per cent.

Toyota slid 1.3 percent to 7,050 yen. The world's most profitable auto maker hit a lifetime high of 7,370 yen last week.

GDP IN FOCUS The market could see another wave of selling if Tuesday's GDP data comes in below expectations, said Shigemi Nonaka, special adviser at Polestar Investment Management.

''Some people are saying that weak GDP is largely factored in, but I don't think so,'' Nonaka said, adding that the Nikkei could slip as as low as 15,800 if the data disappoints.

GDP is expected to have grown 0.2 per cent in price-adjusted terms from July to September, compared with the previous quarter, according to a Reuters poll.

In such a bearish environment, Nonaka said he was looking for stocks with strong earning prospects that had been oversold. In particular, he said he likes trading companies such as Mitsui&Co.

Ltd. and some speciality retailers such as Don Quijote Co. Ltd.

Nippon Telegraph and Telephone Corp. dropped 2.6 per cent to 562,000 yen after Japan's largest telecoms operator on Friday posted a 9.4 percent fall in first-half operating profit on lower voice call revenues and higher costs at its mobile unit.

Sega Sammy Holdings Inc. declined 4.4 percent to 2,850 yen after the video game and slot machine maker on Friday cut its group net profit forecast for the year to March by 20 per cent due to sluggish sales of pachinko machines.

Trade volume slipped from the previous session, with 766 million shares changing hands on the Tokyo exchange's first section. That was below last week's morning average of 782 million shares.

Decliners beat advancers by a ratio of nearly six to one.

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