Japan's Nikkei ekes out small gains, Topix down as techs hit

* Tech shares slump in step with Apple's fall on Monday
* Nikkei volatility index hits 1-1/2-year low
* Defensive shares in demand

By Hideyuki Sano
TOKYO, July 9 (Reuters) - Japan's Nikkei share average eked
out small gains on Tuesday but the broader market fell as Apple
suppliers and other technology firms dropped in step with Apple.
The Nikkei share average .N225 rose 0.14% to 21,565 while
the broader Topix .TOPX fell 0.22% to 1,574.89, with small cap
shares hit the most.
Topix small .TOPXS which consists of main board shares
excluding 500 of the biggest companies fell 0.7%, while Topix
500 .TOPX500 fell 0.17%, with Topix core 30 .TOPXC of top 30
firms falling just 0.05%.
Nikkei's gains stemmed from rises in a few heavyweights in
the index, including Fast Retailing 9983.T and FamilyMart Uny
8028.T , which rose 1.5% and 4.1% respectively.
Defensive shares, including FamilyMart, were in demand as
investors continued to favour sectors seen as least susceptible
to global risks.
Retailers .IRETL.T rose 0.3%, with drugstore chain
operator Welcia Holdings 3141.T gaining 4.3% and rival Tsuruha
Holdings 3391.T 3.2%. Food companies .IFOOD.T rose 0.5% with
NH Foods 2282.T up 1.9%.
Telecom firms also did well, with KDDI 9433.T rising 2.3%
and Softbank Corp 9434.T 0.4%.
On the other hand, electronic part makers and other
semi-conductor-related firms bucked the trend, after Apple Inc
AAPL.O led U.S. technology shares lower on Monday following a
brokerage downgrade.
Apple suppliers followed in its footsteps, with Murata
Manufacturing 6981.T falling 2.0% and Taiyo Yuden 6976.T
down 4.0% and TDK Corp 6762.T off 1.5%.
Shin-etsu Chemical 4063.T fell 2.1% while Keyence 6861.T
shed 1.4%.
The Nikkei has been stuck in a narrow range between 21,500
and 21,800 this month as investors seek more clarity on the U.S.
Federal Reserve's policy and as the global economic outlook.
"There are some questions over whether the Fed can really
cut rates this month after such a strong reading on payrolls
data," said Hiroshi Masushima, market analyst at Monex
Securities.
Masushima said the Nikkei was unlikely to move much until
next month when investors have a clearer idea on the Fed's
policy and Japanese earnings outlook. In fact, expectations of a
range-bound market are wide spread.
The Nikkei volatility index .JNIV , a measure of investors'
volatility expectations based on option pricing, hitting a
1-1/2-year low.