Nikkei drops as U.S.-China trade tensions flare; Sprint sale doubt hits Softbank

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* Daiichi Sankyo turns positive on hopes for its OTCbusiness sale

* SoftBank Group dives more than 5%

By Ayai Tomisawa

The Nikkei share average .N225 declined 0.9% to 21,101.14in midmorning trade.

Tech shares were sold heavily after media reports onWednesday said the United States was considering sanctions onvideo surveillance firm Hikvision. urn:newsml:reuters.com:*:nL2N22Y01P

TDK Corp6762.T dived 6.4%, Advantest Corp6857.T tumbled 4.1%, Tokyo Electron8035.T shed 2.5%, and Sony Corp6758.T slid 3.6%.

"Investors are worried that the U.S. may put restrictions onmore companies in the future, not just Huawei and Hikvision,"said Takuya Takahashi, a strategist at Daiwa Securities. "Ifthat happens, the market will grow more concerned that growth ina new industry such as 5G will be hampered."

SoftBank Group9984.T , which has a stake in Sprint CorpS.N , tanked 5.6%, removing 65 points from the Nikkei benchmarkindex after sources told Reuters that U.S. Justice Department'santitrust division staff have recommended the agency blocksT-Mobile US Inc's TMUS.O$26 billion acquisition of smallerrival Sprint. urn:newsml:reuters.com:*:nL2N22Y09D

Mining shares lost ground after oil prices extended fallsfrom the previous day amid surging U.S. crude inventories. InpexCorp 1605.T stumbled 4.3% and Japan Petroleum Exploration Co1662.T dropped 1%.

Elsewhere, Daiichi Sankyo Co4568.T , which was trading innegative territory in early trade, rose 0.6% after NikkeiBusiness reported that the drugmaker is in talks with severalcompanies to sell its wholly owned over-the-counter (OTC) drugunit, with the final price likely to reach around 100 billionyen ($900 million). urn:newsml:reuters.com:*:nL4N22Z067

Discount clothing chain Nishimatsuya Chain Co7545.T surged 4.6% after its same-store sales in May rose 7.5% on theyear thanks to strong sales in summer clothes as the weather waswarm during Japan's Golden Week holidays.

The broader Topix .TOPX declined 0.6% to 1,536.57.Declining issues outnumbered advancing ones 1,296 to 764.

(Editing by Simon Cameron-Moore) ((ayai.tomisawa@thomsonreuters.com; 81-3-6441-1875; ReutersMessaging: ayai.tomisawa.thomsonreuters.com@reuters.net))

This article appears in: Stocks , World Markets , Politics

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