Economic fears hit Nikkei, tech and oil shares slide

By Elaine Lies

TOKYO (Reuters) - Japan's Nikkei average looked set to snap a 7-day winning streak on Thursday, sliding 2.3 percent after surprisingly bad U.S. jobs data and an Intel Corp (INTC.O) revenue warning fanned fears about the U.S. economy. Kyocera Corp (6971.T) and other tech shares bought up over the past few days slid, along with carmakers. The exception was Mitsubishi Motors Corp (7211.T), which shot up 5 percent after the Nikkei business daily reported it will begin supplying electric cars to PSA Peugeot Citroen Group (PEUP.PA) as early as next year.

Resource linked-shares such as oil and gas field developer Inpex (1605.T) slid after oil fell 12 percent on Wednesday, its largest percentage fall in 7 years, on an unexpected rise in crude inventories.

Recession fears were heightened by a grim private sector jobs report coupled with the warning from top chip maker Intel, which said its revenue for the fourth quarter would not meet the lowered forecast it had given in November, citing weakening demand for personal computers

"Everyone's been saying the market has factored in bad economic data and poor results, but now we're seeing that this wasn't really true," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

"From here on we may see the real recession, and in that sense, the rise in global stock markets around the end and start of the year may actually have been based on errors of judgment."

The benchmark Nikkei .N225 shed 212.50 points to 9,026.74 after briefly falling below 3 percent and 9,000, snapping its longest winning streak since March-April 2006. The broader Topix lost 1.7 percent to 872.80.

Other market players said that while the Nikkei's slide could well be a brief break in a rising trend likely to continue until later this month, the longer-term outlook was bleak. "If the market was reflecting reality today, we wouldn't be at the levels we are now, we'd be near 7,000. There's still a lot of hopes for the new U.S. administration," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

According to ADP, a private employment service, private employers shed 693,000 jobs in December, up from the revised 476,000 jobs lost in November and far more than economists estimated.