* Hi-tech shares may be new victim of China concerns -- strategist
* Nitto Denko shares tumble despite strong earnings
* Construction equipment makers under pressure
* Honda bucks trend, jumps 7 pct on upbeat North America sales
By Hideyuki Sano
TOKYO, Aug 3 (Reuters) - Japanese shares fell on Monday, snapping a three-day winning streak, as a barrage of earning reports failed to dispel growing concerns over a slowdown in China’s economy.
The Nikkei average dropped as much as 0.9 percent and last stood at 20,478.60 by midday, down 0.5 percent.
The broader Topix index was down 0.3 percent at 1,654.10.
The Nikkei has lost steam since hitting an 18-1/2-year high in June amid fears that sharp falls in Chinese shares may inflict further damage on the Chinese economy -- Japan’s major export market.
“There is no denying that concerns about the Chinese economy are affecting Japanese shares. Not only construction equipment makers and commodity-related firms but there are growing concerns about hi-tech shares given possible slowdown in smartphone sales (in China),” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
A case in point was Nitto Denko Corp,
The firm, which makes film for smartphones, saw its shares tumble 5 percent despite strong earning for April-June announced on Friday.
The drop echoes a slump in other hi-tech shares following earning announcements, such as robot-maker Fanuc and Tokyo Electron, suggesting growing worries that the hi-tech sector is losing momentum, Fujito said.
Construction equipment makers remained under pressure, with Komatsu falling 1.4 percent and Hitachi Construction 2.3 percent.
China’s factory activity shrank more than initially estimated in July, contracting by the most in two years as new orders fell and dashing hopes that the world’s second-largest economy may be steadying, a private survey showed on Monday.
The report followed a downbeat official survey on Saturday which showed growth at manufacturing firms unexpectedly stalled, reinforcing views that the cooling economy needs more stimulus even as it faces fresh risks from a stock market slump.
Chinese shares opened lower on Monday, busting any hopes held by some investors that Beijing’s victory to host the 2022 winter Olympics could bolster sentiment frayed by weeks of massive selling and heavy-handed interventions by regulators.
A failure at the weekend by ministers of 12 Pacific Rim countries to reach a free trade pact -- the Trans-Pacific Partnership (TPP) -- also soured sentiment, some market players said.
“There remains a chance that trade ministers will meet again later this month. But the news hurt sentiment as the TPP has been one of few positive themes for the market,” said Masayuki Doshida, senior market analyst at Rakuten Securities.
The deal has been considered to benefit some exporters such as truck makers, as well as some importers.
Honda bucked the trend, jumping 7 percent, after it reported solid April-June earnings thanks to robust sales in North America. (Editing by Kim Coghill)