TOKYO, May 21 (Reuters) - Japan's Nikkei share average gave up most of its early gains on Tuesday to trade little changed, as investors slowed activity following recent sharp gains.

The Nikkei was up 0.17% to 39,135.91 by the midday break, after rising as much as 0.7% earlier in the session.

The index rose 0.78% in the previous session, hitting 39,000 level for the first time in a month.

The broader Topix was up 0.16% to 2,772.57.

"Investors sold stocks because they turned cautious that the index has risen too much after its previous session's gain," Fumio Matsumoto, chief equity strategist at Okasan Securities said.

"The market does not believe the Nikkei to reclaim 40,000 level anytime soon."

Chip-related shares rose to lift the Nikkei, with Advantest and Tokyo Electron rising 2.17% and 0.85%, respectively

Insurers were strong, with MS&AD Insurance Group surging 15% to become the top percentage gainer on the Nikkei.

The insurer said on Monday its group net profit is forecast to rise 65% and that it would buy back up to 8.2% of its shares.

Peer Tokio Marine Holdings rose 4.6% after announcing it would sell down cross-share holdings to zero by the end of fiscal 2029/30.

The insurance sector rose 4% to become the best performer among the Tokyo Stock Exchange's (TSE) 33 industry sub-indexes.

Sompo Holdings fell 4.53% to become the worst percentage loser as the insurer flagged a 45% decline in its annual net profit.

KFC Holdings was untraded with a glut of buy orders after the operator of Kentucky Fried Chicken outlets said U.S. buyout fund Carlyle Group offered to buy the shares of the company at 6,500 yen per stock.

Of more than 1,600 stocks trading on the TSE's prime section, 48% of shares rose and 47% fell with 3% being flat.

(Reporting by Junko Fujita; Editing by Mrigank Dhaniwala)