Japan's Nikkei holds steady; Fanuc up, Renesas falls

* Fanuc up on upbeat Morgan Stanley MUFG note

* Renesas sags on capital-raising plan

* Nomura falls; sources say linked to 2nd insider case

TOKYO, May 28 (Reuters) - Japan's Nikkei average steadied on
Monday as gains in industrial robot maker Fanuc Corp on
the back of a bullish broker note helped offset weakness in
Japan's top investment bank Nomura Holdings and Renesas
Electronics Corp.

The Nikkei was flat at 8,583.81, holding below its
five-day moving average near 8,603, a nd still in "oversold"
territory, wi th its 14-day relative strength index at 28.7.

The benchmark fell for an eighth straight week last week to
log its worst weekly losing streak in 20 years, and is down 16.3
percent since hitting a one-year high on March 27 as concerns
about the impact of a possible Greek exit from the euro zone and
worries over slowing global growth intensified.

"The market has been panicking for eight weeks. It's
probably not sensible to forecast exactly when it will cease
panicking. It's important to consider what it focuses on when it
ceases panicking, which is probably the extreme valuations,"
said Nicholas Smith, Japan strategist at CLSA.

"The further it falls, the more it should rebound when the
market comes to its senses," he said, pointing to real estate
companies and Sumitomo Mitsui Financial Group as among
stocks on which to focus.

Index heavyweight Fanuc gained 0.5 percent after Morgan
Stanley MUFG raised its price target on the producer of
industrial robots for smartphone makers and suppliers, saying a
recent correction in the stock was overdone.

Gains in Toyota Motor Corp, Honda Motor Co
and Canon Inc after a recent battering, up between 0.3
and 0.6 percent, also supported the market.

Renesas Electronics Corp sank 10.6 percent after
news over the weekend that the chipmaker plans to raise more
than 100 billion yen ($1.3 billion) to pay for a proposed
restructuring aimed at turning around its business.

Also weighing on the market, Nomura Holdings Inc
dropped 1.2 percent after Japan's largest broker was linked to a
second insider trading case involving a fund management arm of
Sumitomo Mitsui Trust Holdings Inc.

Sumitomo Heavy Industries Ltd sagged 6.4 percent
after the company said on Friday that its contract with the
Ministry of Defense had been suspended due to over-reporting of
expenses.

The broader Topix slipped 0.2 percent to 720.59.

Underlining the gloomy outlook, the Topix's one-month
earnings momentum - analysts' earnings upgrades minus downgrades
as a total of estimates - slowed to 0.1 percent from 5.4 percent
last month after rebounding in recent months, Thomson Reuters
Datastream data showed.

(Reporting by Dominic Lau; Editing by Chris Lewis)