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Hospitality sector boosts Tokyo stocks, stay-at-home winners lose footing

Published 10-11-2020, 12:28 pm
Updated 10-11-2020, 12:30 pm
© Reuters.

* Nikkei hits fresh 29-year high, value shares jump

* Vaccine news raises hope of broad earnings recovery

* Airlines, train companies jump, OLC hits record high

* Internet companies, high-flying Mothers index dive

* Turnover hits 4 trln yen, highest in 5 months

By Hideyuki Sano

TOKYO, Nov 10 (Reuters) - Japan's Nikkei share average hit its best level in nearly three decades on Tuesday as pandemic-battered shares of airlines, railway operators and department stores jumped on news of progress in the development of a COVID-19 vaccine.

Investors switched to beaten-down value shares while dumping those which benefited from the stay-at-home trend during the pandemic, such as internet service firms and game companies.

"With increasing clarity, people are getting more optimistic," said Masa Takeda, portfolio manager at SPARX, subadvisor to the Hennessy Japan Fund.

"What I'm hoping to see is the economy starting to open up again around the world. I think corporate earnings should start to gain some footing to catch up to market levels."

The Nikkei rose 0.26% to close at 24,905.59 points .N225 after hitting its highest level since June 1991 during the session. The broader Topix .TOPX gained 1.12% to 1,700.80. Turnover jumped to 4.075 trillion yen, the biggest in five months.

Airliner ANA Holdings 9202.T jumped 18.1%, while the country's three big railway operators — East Japan Railway 9020.T , West Japan Railway 9021.T and Central Japan Railway 9022.T — all vaulted about 15%.

Department store chain J.Front Retailing 3086.T gained 15.6%, while rival Isetan Mitsukoshi 3099.T soared 13.0%. Tokyo Disney Resort operator OLC 4661.T rose 6%, hitting a record high.

Drugmaker Pfizer (NYSE:PFE) PFE.N and German partner BioNTech SE 22UAy.F said their experimental COVID-19 vaccine was more than 90% effective based on initial trial results. Value index .TOPXV rose 3.2% as financials .IINSU.T .IBNKS.T benefited from a surge in U.S. bond yields while other "old economy" shares, such as steelmakers .Istle , gained on hopes of a broader economic recovery.

Internet service firms and game companies, with their valuation stretched after concentration of investors' funds, fell out of favour.

Bandai Namco Holding 7832.T lost 8.1%, while Nintendo 7974.T shed 4.5%. Internet firm Z Holdings 4689.T tumbled 7.6% while medical service platform operator M3 2413.T , one of the market's best performers this year, dropped 7.3%.

Mothers start-up shares .MTHR , another high-flyer this year, fell 6.4%, its biggest fall in eight months.

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