Japan shares bounce back as upbeat earnings offset virus worries
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.
The Nikkei .N225 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 .TOPX gained 1.64% to 1,932.20.
Cyclical shares including shippers .ISHIP.T and steelmakers .ISTEL.T led the gains while upbeat earning results infused the market with some energy.
NEC 6701.T rose 4.5% after the electronics and IT company posted a surprise return to profits in the April-June quarter.
Autopart maker Denso 6902.T jumped 5.1%, extending its gains to a second session after reporting strong earnings.
Misumi Group 9962.T gained 8.4% to hit a record high, after the trading firm specialised in factory automation and machine parts reported brisk earnings.
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.
Among decliners, Kose 4922.T tumbled 11.4% after the cosmetic firm's results for April-June fell far short of market expectations.
West Japan Railway 9021.T lost 6.8% after the railway company posted disappointing earnings, underscoring the damage from the pandemic to the sector.
East Japan Railway 9020.T and Central Japan Railway 9022.T fell 2.8% and 2.3% respectively, also following their earnings.
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.
"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, chief strategist at Monex Securities.
Reporting by Hideyuki Sano; Editing by Rashmi Aich
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