Nikkei down 0.5 pct, ends worst H1 since 1995

(Adds trade volume, detail)

By Aiko Hayashi

TOKYO, June 30 (Reuters) - Japan's Nikkei stock average dipped 0.5 percent on Monday to end its worst first half since 1995, though it gained about 8 percent this quarter, recovering about half of what it lost since a year-low hit in mid-March.

Retailers weighed on the market, with Takashimaya Co (8233.T: Quote, Profile, Research, Stock Buzz) down 1.3 percent after the department store operator's first-quarter operating profit fell 8 percent and it cut its annual sales outlook. [ID:nT272SUYQR]

One bright spot was trading houses such as Mitsubishi Corp (8058.T: Quote, Profile, Research, Stock Buzz) and other energy-linked shares after oil prices rose to a record near $143 a barrel on Friday as a drop in global equities markets sent investors into commodities. [O/R]

"There are expectations for a rebound, but investors can't buy too aggressively due to last week's fall in U.S. stocks, unstable currency moves and uncertainty about the outlook for oil prices," said Yoshinori Nagano, chief strategist at Daiwa Asset Management.

The Nikkei average .N225 shed 62.98 points to 13,481.38, falling for an eighth straight day, its longest losing streak since last November.

The benchmark fell 11.9 percent for the first half of this year, the worst since 1995 when it lost 26 percent.

Still, it gained 7.6 percent for the April-June quarter.

The broader Topix edged down 0.04 percent to 1,320.10.

Nagano also said that while the market could expect another downturn in the short term, the U.S. economy, a key market for global goods, appears to be on a recovery track from next year.

"The U.S. economy is bad now, but it's not accelerating in a downward spiral," he said.

"I wouldn't be surprised if the (Japanese) market started moving solidly in the latter half of this year as the stock market could start factoring in the recovery about six months in advance."

Market participants said active buying was also inhibited before the Bank of Japan's tankan business sentiment survey due on Tuesday and U.S. jobs data later in the week.

"We can't really be sure if the market has hit its bottom as that still depends on how the credit-squeeze problems will pan out," said Katsuhiko Kodama, senior strategist at Toyo Securities.

RETAIL DRAGS

Takashimaya shed 1.3 percent to 963 yen.

Fellow department store operator Isetan Mitsukoshi (3099.T: Quote, Profile, Research, Stock Buzz) also slid after Takashimaya's results confirmed a tough operating environment. It lost 5.6 percent to 1,137 yen.

Scattered selling of blue-chip exporters saw Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) dragged down 4.1 percent to 4,640 yen, while industrial robot maker Fanuc Ltd (6954.T: Quote, Profile, Research, Stock Buzz) slid 3.1 percent to 10,370 yen.

Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) slipped 1.2 percent to 5,010 yen.

Sony also fell after its mobile phone joint venture with Ericsson (ERICb.ST: Quote, Profile, Research, Stock Buzz) warned on Friday net income before taxes is estimated to be about break-even in the second quarter of calendar 2008 due to weaker demand for its more expensive phones.

Trading houses gained as Japan's top trading firms invest heavily in overseas oil fields and mines. Mitsubishi Corp, Japan's largest trading house, rose 3.2 percent to 3,500 yen.

Among other energy-linked shares, Nippon Oil (5001.T: Quote, Profile, Research, Stock Buzz), Japan's largest oil distributor, shot up 7.4 percent to 713 yen. Oil explorer Inpex Holdings (1605.T: Quote, Profile, Research, Stock Buzz) gained 4.7 percent to 1.34 million yen.

Trade was moderate on the Tokyo exchange's first section, with 1.83 billion shares changing hands, in line with last week's daily average.

Declining stocks outpaced advancing ones by 816 to 796. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)