Nikkei falls 1.8 pct to 5-mth low, Inpex slides

*Nikkei falls to five-month closing low

*Inpex and other energy shares plunge on oil price fall

*Fukuda resignation mostly seen having little direct impact (Adds stocks and comments)

By Taiga Uranaka

TOKYO, Sept 2 (Reuters) - Japan's Nikkei stock average fell 1.8 percent to a five-month closing low on Tuesday, with energy shares such as oil and gas field developer Inpex Holdings Inc plunging on a sharp slide in oil prices.

The market moved in a narrow range for most of the day but fell sharply in the last hour of trade, hit by a sharp drop in index futures, whose impact was exaggerated by thin trade.

While most market participants said Prime Minister Yasuo Fukuda's abrupt resignation had no direct impact on the market, some said there was nervousness about foreign investor reaction.

"After all, this is two prime ministers in a row who have basically just given up, it looks pretty negative," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.

The benchmark Nikkei .N225 ended down 224.71 points to 12,609.47, after rising as high as 12,920.52, while the broader Topix fell 1.5 percent to 1,212.37.

Although trade picked up slightly, with 1.8 billion shares changing hands, compared to last week's daily average of 1.42 billion, it was still thin.

"The number of market participants was small despite expectations for foreign investors to return after the Labor Day holiday," said Norio Shimura, deputy head of the equity department at Chuo Securities.

ENERGY STOCKS DOWN

Inpex fell 6.7 percent to 1.07 million yen, becoming the biggest percentage loser on the Nikkei after oil plunged more than $4 on Monday.

Concerns that Hurricane Gustav would cause lasting damage to the U.S. oil sector eased after the storm weakened before hitting the Louisiana coast. [O/N]

Trading houses, which have stakes in oil fields, were also hit, with Mitsubishi Corp dropping 4.1 percent to 2,825 yen and Mitsui & Co down 5.4 percent at 1,790 yen.

Toto Ltd slid 4.7 percent to 759 yen after the toilet maker said it was likely to post a first-half net loss of 3 billion yen, down from its previous estimate of 1 billion yen profit on a special loss due to problems in its hot water heaters.

Aso Foam Crete Co Ltd ended up 29.6 percent, or by the daily limit of 80 yen, at 350 yen, on speculation that Liberal Democratic Party Secretary-General Taro Aso would become prime minister following Fukuda's resignation.

The Jasdaq-traded company which specialises in concrete structure projects is owned by Aso's family and is the only listed company among the 60 firms that make up the Aso Group.

Animation and comic-related shares also attracted investors as Aso is known as a comic buff.

Mandarake Inc , a second-hand "manga" comic store chain, soared 16.5 percent to 353,000 yen, and trading card retailer Broccoli Co Ltd jumped 20.7 percent to 70 yen.

Declining shares beat advancing ones by more than 9 to 1. (Reporting by Taiga Uranaka; Editing by Edwina Gibbs)