Nikkei falls, Matsushita down and cheaper oil weighs

TOKYO, Jan 10 (Reuters) The Nikkei average fell 1.71 percent on Wednesday, hitting its lowest close in three weeks as recent gainers dropped and Matsushita Electric Industrial Co.

declined on concern about its heavy spending on a plasma display factory.

Lower oil prices encouraged hedge funds to unwind positions in the crude market and lock in profits in Japan and other Asian stock markets, market participants said.

Bucking the overall bearish trend, Nintendo Co. Ltd. advanced after raising its annual profit estimate, while Softbank Corp.

gained on speculation the company may sell iPod phones in Japan after Apple Inc. on Tuesday unveiled the iPhone.

The Nikkei lost 295.37 points to 16,942.40, the lowest close since Dec. 19. The broader TOPIX index dropped 1.72 percent to 1,663.00.

REUTERS CS DS1150