* Nikkei drops 0.4 pct, Topix down 0.3 pct
* Komatsu tumbles 8.6 pct after cutting profit outlook
* Hedge funds, Japanese retail investors taking profits
TOKYO, Oct 29 (Reuters) - Japanese stocks slid on Tuesday morning, hit by Komatsu Ltd dropping sharply after the world's second largest equipment maker issued a profit warning, dragging down other companies exposed to emerging markets. The earnings season has failed to impress so far, raising doubts about Japan Inc.'s outlook and hampering the broad market. The Nikkei fell 0.4 percent to 14,334.90 in mid-morning trade, after climbing 2.2 percent on Monday. Support for now is seen around an important technical level -- Ichimoku cloud top -- at 14,235. Komatsu tumbled as much as 8.6 percent to a two-month low after the company cut its full-year operating profit forecast by more than 30 percent on Monday, citing a worse-than-expected drop in demand for mining equipment. It was the most-traded stock by turnover on the main board. The surprisingly downbeat announcement hurt its rivals and other companies with high exposure to China and emerging markets. Industry peer Hitachi Construction Machinery Co Ltd , lost up to 7.3 percent to hit a three-week low after the company reported a 33.6 percent drop in its April-September net profit. Emerging markets-sensitive tyre maker Bridgestone Corp fell 0.9 percent. Traders say the disappointing earnings reports have prompted some investors to book profits from across the market. "I expect people to take more profits as the market will be running out of positive factors after earnings," said Kyoya Okazawa, head of global equities and commodity derivatives at BNP Paribas in Tokyo. "Buying by long-only players are subdued this week. Outperformers this year with high foreign ownership, such as SoftBank, are likely to be prone to profit-taking," Okazawa also said. Index heavyweight SoftBank Corp fell 1.2 percent. KDDI Corp provided some welcome positive news on earnings and bucked the market. The stock rose 0.8 percent after the mobile operator's net profit for the April-September period jumped 104.4 percent from a year earlier to a record 163.01 billion yen ($1.67 billion) due mainly to strong smartphone sales. Some overseas hedge funds were cashing in ahead of book closing in late November, said Yasuo Sakuma, portfolio manager at Bayview Asset Management. Investors will have further trading opportunities from another batch of earnings later in the day, including from Kobe Steel Ltd, Hitachi Ltd, Fanuc Corp, and Tokyo Electron Ltd. Markets are also watching out for this week's outcomes of policy meetings from the U.S. Federal Reserve and the Bank of Japan, which are widely expected to keep policy on hold. The broader Topix shed 0.3 percent to 1,195.36 in moderate trade, with volume at 47.7 percent of its full daily average for the past 90 trading days. The benchmark Nikkei has risen 38 percent so far this year, driven up by aggressive BOJ and government stimulus measures.