TOKYO, May 16 (Reuters) - Japan's Nikkei stock average shed most of its early gains on Monday as data showing a sharper-than-expected slowdown at factories in major trade partner China offset the boost from a tech-driven rally on Wall Street on Friday.

The Nikkei entered the midday break up 0.24% at 26,492.29 after earlier rising as much as 1.55% to a one-week high of 26,836.96.

Despite the small gain, there were more than twice as many losers as winners among the index's 225 component stocks.

The broader Topix slipped 0.14% to 1,861.64 after opening the day about 1% higher.

China's industrial production unexpectedly fell 2.9% last month, while retail sales shrank a bigger-than-forecast 11.1% amid stringent coronavirus curbs on activity.

The deepening slowdown overshadowed strong gains in U.S. stocks on Friday, led by the Nasdaq's 3.7% advance. The Philadelphia SE Semiconductor Index jumped 5% on the day.

"The risks from China's slowdown are one of the main reasons for the poor sentiment in equity markets," said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management in Tokyo.

"At the same time, we may be close to the peak in terms of China concerns," with the government now starting to ease COVID-19 restrictions, he said.

Shanghai will gradually begin reopening businesses such as shopping malls and hair salons from Monday, following weeks of strict lockdowns.

On the Nikkei, tech was the best performing sector, up 0.74%, while basic materials led the losers with a drop of 1.10%, followed by a 1.05% slide for utilities.

Earnings results also divided the market, with Friday marking the climax of the reporting season. For instance, precision parts maker NTN Corp was the biggest percentage gainer with a 12.15% surge compared with Dowa Holdings' 13.26% tumble.

Automakers were also split, with Mazda rallying a further 5.06% following gains on Friday after its earnings.

But Honda slumped 4.25% on a disappointing earnings forecast given after Friday's close. Motorcycle-maker Yamaha sank 9.32%, having reported underwhelming results after the bell on Friday. (Editing by Aditya Soni)