Nikkei flat, Sharp hit by price probe

TOKYO, Dec 13 (Reuters) The Nikkei average dipped in and out of negative territory on Wednesday with Sharp Corp. sold after it said it was under investigation over possible price-fixing for liquid crystal displays.

But Japan Tobacco Inc extended gains on speculation it would make a bid for British tobacco firm Gallaher Group Plc. L> ''The market has potential to edge higher towards the year-end,'' said Kenichi Hirano, an operating officer at Tachibana Securities.

''Overall, investors' sentiment is towards buying.'' The Nikkei was down 6.49 points or 0.04 percent at 16,631.29 as of 0111 GMT, while the broader TOPIX index fell 0.14 percent to 1,634.49. The Nikkei ended the previous session at its highest close since Oct. 27 at 16,637.78.

Consumer electronics maker Sharp fell 1.9 percent to 2,030 yen after it confirmed it was being investigated by Japanese and U.S.

authorities in a probe into possible price-fixing by makers of liquid-crystal (LCD) displays.

South Korea's Samsung Electronics Co. Ltd. and LG.Philips LCD Co.

Ltd. are under similar probes, sending their shares tumbling a day earlier.

A joint venture between Japan's Seiko Epson Corp. and Sanyo Electric Co. Ltd. that specialises in small LCD screens for mobile phones and digital cameras is also part of the investigation. Seiko Epson shares were down 0.8 percent at 2,955 yen, while Sanyo's shares fell 0.6 percent to 164.

Another notable decliner was Dainippon Sumitomo Pharma Co. Ltd., which tumbled 4.6 percent to 1,443 yen after the drug maker said Merck&Co had decided to halt development of the Japanese firm's experimental drug for schizophrenia, Lurasidone (SM-13496).

REUTERS DKS PM0717