* Nikkei sinks below support at 9,612.51
* Tepco up 8 pct, accounts for over 10 pct of total volume
* Strong aftershocks keep investors on edge -fund manager
* Selling in blue-chip shares as earnings worries weigh
* Oil, gas stocks track commodities decline
By Antoni Slodkowski
TOKYO, April 12 (Reuters) - Tokyo stocks fell 1.6 percent, dropping for a second straight day on Tuesday, as investors sold off car and electronics makers on growing worries that the impact of the March 11 earthquake and tsunami may be more severe than hoped for.
Further declines in oil prices spurred profit-taking in energy-related shares and helped push the Nikkei stock average, below key support of 9,612.51, where April Nikkei options settled last week, and investors were keen to see whether the benchmark could rise above it before the bell.
"The market had until now thought that the quake's impact would be felt most severely in the April-June quarter, but it seems it may drag on for at least another quarter, and will keep the market depressed for much longer," said Hideo Arimura, a senior fund manager at Mizuho Asset Management.
Underscoring those worries, Toyota warned late on Monday that the uncertain supply of parts could threaten its output of vehicles through July, the latest sign of trouble for the global auto industry stemming from the earthquake.[ID:nN1192492]
The world's largest carmaker fell in line with most other manufacturers and blue-chip exporters, shedding 1.5 percent to 3,210 yen, while Sony Corp slipped 3 percent to 2,500 yen.
Trading volumes remained thin as the market awaited U.S. corporate earnings, which may yield clues about the damage to the global supply chain and after that Japanese earnings reports in late April and early May.
One billion shares changed hands on the Tokyo bourse's first section by the midday break, suggesting that Tuesday's total volume could be on par with the previous day's levels, which were the lowest since the quake and third-lowest in 2011.
By the midday break the Nikkei fell 1.6 percent or 155.77 points to 9,563.93, while the broader Topix index dropped 1.4 percent to 840.52.
The next support is seen at 9,500 -- a low hit during a massive post-quake selloff a month ago.
OIL STOCKS SOLD
Shares of Tokyo Electric Power Co , the operator of the stricken Fukushima Daiichi nuclear power plant, rose 8 percent in volatile, heavy trade to 539 yen after falling as much as 8 percent right after open. Vice Trade Minister Tadahiro Matsushita said he was not considering nationalisation of the company.
Trade in the stock accounted for more than 10 percent of the total volume on the TSE's first section by the break.
Engineers put out a fire at the plant which started after another major aftershock rocked eastern Japan, swaying buildings in central Tokyo and closing Narita airport runways.[ID:nL3E7F80U1][ID:nL3E7FB2TZ]
"I feel the market is being undermined by a series of aftershocks that we've been experiencing recently," said Ryosuke Okazaki, chief investment officer at ITC Investment Partners Corp.
Shares of oil and gas developers Inpex Corp and Japan Petroleum Exploration Co (Japex) succumbed to profit-taking as oil extended the previous day's decline amid mounting concerns that rising fuel costs will erode demand and threaten the global economic recovery.
Inpex, Japan's biggest oil and gas developer and one of the biggest post-quake outperformers -- up 13 percent since the quake -- fell 4.1 percent to 627,000 yen. Japex lost 3.3 percent to 4,020 yen.
Analysts said that while falling commodities prices will pressure energy stocks, in the long run they will also help to ease worries over the impact of rising raw material costs on input costs and margins, providing some support to the market. (Additional reporting by Ayai Tomisawa and Chikafumi Hodo; antoni.slodkowski@thomsonreuters.com; +81-3-6441-1875; Reuters Messaging: rm://antoni.slodkowski.reuters.com@reuters.net; If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)