* Topix hits lowest since May 2017
* Trading houses outperform on report of more shareholder returns
By Ayai Tomisawa
TOKYO, Dec 18 (Reuters) - Japan's Nikkei tumbled to a one-week low on Tuesday morning after Wall Street took a beating overnight, with cyclical stocks selling off on worries about cooling global growth.
The Nikkei share average dropped 1.3 percent to 21,227.83 in midmorning trade after hitting 21,107.13, the lowest level since Dec. 11.
The broader Topix fell as much as 1.8 percent to 1,565.44, the weakest since May 2017.
Cyclicals such as electronics products makers and technology stocks bore the brunt of selling.
Sony Corp tumbled 2.7 percent, Nintendo Co declined 2.6 percent, while Sumco Corp shed 2.3 percent.
"Mid-to-long investors are changing their global asset allocations to reflect their risk-averse stance," said Shogo Maekawa, global market strategist at JPMorgan Asset Management.
"They are reducing risky assets like stocks and adding more fixed income products such as short-term U.S. bonds."
On Monday, Wall Street's major indexes all slid more than 2 percent on concerns about slowing economic growth before a highly anticipated meeting of the Federal Reserve this week for clues on the U.S. monetary policy outlook in 2019.
Tuesday's losers included Takeda Pharmaceutical, which tumbled 6.4 percent after Moody's cut its rating to Baa2 from A2 on its decision to purchase Shire Plc.
Park24 dived 13 percent after the parking lot operator forecast a 7.6 percent drop in its current fiscal year net profit.
Trading houses outperformed the market after the Nikkei business daily reported that several of these major firms planned to boost shareholder returns in the next three years.
Mitsubishi Corp rose 0.5 percent after the paper said the company plans to raise dividend payouts to 200 yen per share for the fiscal year ending March 2022, up from the current 125 yen. The company plans to use 800 billion yen in the next three years for dividends and share buybacks, the Nikkei said.
Itochu Corp and Mitsui & Co dropped 0.4 percent and 0.2 percent, respectively, but their losses were contained by the Nikkei's report on their plan to allocate 500-600 billion yen for shareholder returns in the next three years. (Editing by Shri Navaratnam)