Nikkei falls, banks still weak but machinery orders help

* Machinery orders help sentiment

* Banks weak on Tepco burden concern

By Ayai Tomisawa

TOKYO, May 16 (Reuters) - Japan's Nikkei stock average fell
on Monday, after jitters about global economic growth sapped
appetite for U.S. and European stocks late last week, while bank
stocks lost more ground on concerns about their loans to Tokyo
Electric Power .

But surprisingly strong machinery orders lent support to the
market, feeding hopes that reconstruction demand after the March
earthquake and tsunami may support capital spending.

"The market had expected a drop in orders, so this is
somewhat helping the mood," said Tomochika Kitaoka, a strategist
at Mizuho Securities.

Investors also remain somewhat hobbled while Japan's
earnings season continues amid much uncertainty about the
outlook as supply disruptions have meant many manufacturers
have not given their usual guidance, while analysts are still
working out their verdicts on the ones that have.

The benchmark Nikkei average was down 0.8 percent
at 9,572.51, while the broader Topix fell 1.0 percent to
831.26.

In the United States on Friday, stocks fell hit by concern
about slowed growth worldwide, the coming end of a supportive
Federal Reserve policy and the fear of a worsening euro-zone
debt crisis are undermining the stock market's ability to
maintain an upward direction. [ID:nN13152655]

Financial stocks remained weak after the government's top
spokesman sparked concern on Friday that banks are likely to be
asked to ease troubled Tokyo Electric Power Co's loan
burden.

On Sunday, Japanese officials denied the government will ask
banks to forgive loans to Tepco to help it cope with massive
compensation claims arising from the crisis at the plant but
investors still seemed worried.[ID:nL4E7GF015]

"Investors' concerns are mainly due to uncertainly over how
much banks will have to shoulder for Tepco," said Yumi
Nishimura, a senior market analyst at Daiwa Securities.

"Until there are clear indications, investors may avoid
investment in banks."

Mitsubishi UFJ Financial Group shed 1.0 percent to
379 yen, Mizuho Financial Group slipped 0.8 percent to
129 yen and Sumitomo Mitsui Financial Group weakened
1.7 percent to 2,411 yen. Mizuho and SMFG also said on Friday
they expect core lending activities to remain sluggish last
year.

Machinery makers outperformed, with Fanuc Ltd
rising 0.4 percent to 12,990 yen and Mitsubishi Heavy Industries
gaining 0.5 percent to 379 yen.

Core machinery orders rose 2.9 percent in March from the
previous month, Cabinet Office data showed on Monday, compared
with the median estimate for a 9.6 percent decline and following
a revised 1.9 percent decline in the previous month.
[ID:nL4E7GG002]

Shares in Bridgestone Corp gained 2.1 percent to
1,864 yen after the tyremaker on Friday hiked its operating
profit forecast for the business year to December 2011 to 167
billion yen from 140 billion yen, citing cost-cutting and higher
tyre prices overseas.[ID:nT1363U1F

(Additional reporting by Antoni Slodkowski; Editing by Edwina
Gibbs)