Nikkei dips on further tech worries

NEC and other tech stocks stumbled in Tokyo trading on Monday

TOKYO, Japan -- Tokyo's Nikkei 225 average slipped more than two percent by early afternoon Monday.

Most other markets in the region were also weaker.

The Nikkei was down 255.98 points or 2.08 percent to 12,050.10 -- close to the psychologically important 12,000-point barrier.

The broader Topix was also down, losing 27.6 points or 2.2 percent to 1225.88.

Investors punished the tech sector amid concerns the global economic slowdown will stifle their chances for a rapid recovery.

Other markets in the region also tumbled as profit warnings from major U.S. and European firms chilled investor sentiment.

Korea down 3.3 percent; HK also weak

Australia's benchmark S&P/ASX200 was down 23.6 points to 3330.3, while in Seoul the Kospi was 19.38 points or 3.35 percent lower at 559.16.

Markets in Hong Kong, Taiwan and New Zealand were also lower. The Hang Seng index plunged 375.69 points or 2.8 percent to 12,623.79 by noon.

"The macroeconomic picture is not pretty and all signs are that it will be even worse a month from now," said Hiroaki Muto, general manager of investment trust fund management at Nissay Asset Management.

"Many of the major tech stocks are at very attractive levels, but we still have no evidence of a bottom for earnings, and global conditions have that hope thin."

Consumer electronics giant Sony Corp extended its losses into a sixth straight session. It was down 1.38 percent at 7,150 yen after having hit a 22-month trough of 7,090 yen earlier.

Nikkei may be headed for fresh lows

Traders said the Nikkei could hit fresh 16-year lows on poor results and forecasts from major U.S. firms, such as Motorola and Yahoo, set to unveil second-quarter earnings this week.

Mobile phone giant NTT DoCoMo was down 2.87 percent at 2.03 million yen.

Tech shares also came under pressure after the U.S. Nasdaq index lost 3.65 percent on Friday, while chip shares were hit by a more than eight percent plunge on the Philadelphia semiconductor index.

Major PC and chipmaker Fujitsu Ltd was down 4.45 percent at 1,139 yen, while industry rival NEC Corp lost 4.16 percent to 1,522 yen after touching a two-year intraday low of 1,509 yen.

Japan's number one chip producer, Toshiba Corp, dropped 5.07 percent to 580 yen a 30-month nadir.

Reuters contributed to this report.