May 23, 2019 / 2:36 AM / a month ago

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

* Daiichi Sankyo turns positive on hopes for its OTC business sale

* SoftBank Group dives more than 5%

By Ayai Tomisawa

TOKYO, May 23 (Reuters) - Japan's Nikkei dropped on Thursday morning after renewed U.S.-China trade tensions dragged down technology shares, while index-heavyweight SoftBank Group fell more than 5 percent.

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

Tech shares were sold heavily after media reports on Wednesday said the United States was considering sanctions on video surveillance firm Hikvision.

TDK Corp dived 6.4%, Advantest Corp tumbled 4.1%, Tokyo Electron shed 2.5%, and Sony Corp slid 3.6%.

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

SoftBank Group, which has a stake in Sprint Corp , tanked 5.6%, removing 65 points from the Nikkei benchmark index after sources told Reuters that U.S. Justice Department's antitrust division staff have recommended the agency blocks T-Mobile US Inc's $26 billion acquisition of smaller rival Sprint.

Mining shares lost ground after oil prices extended falls from the previous day amid surging U.S. crude inventories. Inpex Corp stumbled 4.3% and Japan Petroleum Exploration Co dropped 1%.

Elsewhere, Daiichi Sankyo Co, which was trading in negative territory in early trade, rose 0.6% after Nikkei Business reported that the drugmaker is in talks with several companies to sell its wholly owned over-the-counter (OTC) drug unit, with the final price likely to reach around 100 billion yen ($900 million).

Discount clothing chain Nishimatsuya Chain Co surged 4.6% after its same-store sales in May rose 7.5% on the year thanks to strong sales in summer clothes as the weather was warm during Japan's Golden Week holidays.

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

Editing by Simon Cameron-Moore

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