Japan shares bounce back as upbeat earnings offset virus worries

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<p>TOKYO, Aug 2 (Reuters) – Japan’s Nikkei share average bounced back on Monday from a near-seven-month low hit in the previous session, as upbeat earnings countered concerns about the fast-spreading Delta coronavirus variant, which threatens a fragile recovery in the economy.</p> <p>The Nikkei rose 1.58% to 27,715.54, almost erasing losses made on Friday, when it marked its lowest close since early January.
The broader Topix gained 1.64% to 1,932.20.</p> <p>Cyclical shares including shippers and steelmakers led the gains while upbeat earning results infused the market with some energy.</p> <p>NEC rose 4.5% after the electronics and IT company posted a surprise return to profits in the April-June quarter.</p> <p>Autopart maker Denso jumped 5.1%, extending its gains to a second session after reporting strong earnings.</p> <p>Misumi Group gained 8.4% to hit a record high, after the trading firm specialised in factory automation and machine parts reported brisk earnings.</p> <p>With about 40% of companies having reported their earnings, operating profit grew about 240% from a year earlier, analysts at Okasan Securities wrote.

Of those, 211 firms posted positive surprises, compared with 76 with negative ones, they said.</p> <p>Among decliners, Kose tumbled 11.4% after the cosmetic firm’s results for 광주 성형외과 April-June fell far short of market expectations.</p> <p>West Japan Railway lost 6.8% after the railway company posted disappointing earnings, underscoring the damage from the pandemic to the sector.</p> <p>East Japan Railway and Central Japan Railway fell 2.8% and 광주 성형외과 2.3% respectively, also following their earnings.</p> <p>Recovery in travel demand looks set to be delayed further as the nation’s coronavirus cases are soaring at an unprecedented pace due to the spread of Delta variant.</p> <p>”In the short term, the COVID-19 weighs on the market as the government expanded state of emergency and cases in Tokyo hit record high,” said Takashi Hiroki, 광주 성형외과 chief strategist at Monex Securities.

<b>(Reporting by Hideyuki Sano; Editing by Rashmi Aich)</p></div></b>
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