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Nikkei drops as U.S.-China trade tensions hit tech shares

* 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 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 ended 0.6% lower at 21,151.14.

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 6.5%, Advantest Corp declined 2.6%, Tokyo Electron shed 2.5%, and Sony Corp slid 3.7%.

"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 5.3%, removing 62 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.

Elsewhere, Daiichi Sankyo Co, which was trading in negative territory in early trade, rose 1.2%. Driving the increase was a report from Nikkei Business that said the drugmaker was in talks with several companies to sell its wholly owned over-the-counter drug unit for around 100 billion yen ($900 million).

Discount clothing chain Nishimatsuya Chain Co surged 3.2% after its same-store sales in May rose 7.5% from a year earlier, thanks to strong sales in summer clothes as the weather was warm during Japan's Golden Week holidays.

The broader Topix declined 0.4% to 1,540.58. Declining issues outnumbered advancing ones 1,258 to 783. (Editing by Sam Holmes)