* Pandemic fear raises worries about global growth prospects
* Airline, travel firm, Shiseido among worst hit
* Makers of mask, protective attires, infrared camera gain
* Maeda Road Construction soars for 2nd day on takeover bid
By Hideyuki Sano
TOKYO, Jan 21 (Reuters) - Japanese shares dropped on Tuesday, as investors were gripped by fears that an outbreak of a new coronavirus in China could potentially disrupt an improving economic backdrop following a U.S.-China trade deal.
Airlines and travel companies were hit by wider contagion fears, while investors scrambled to buy makers of masks, protective attires and even infrared cameras that are used for screening passengers at airports and other key locations.
The Nikkei share average .N225 fell 0.91% to 23,864.56 from a 15-month high touched on Monday and the broader Topix .TOPX lost 0.53% to 1,734.97.
"We had believed the global economy will recover this year after a slowdown last year. But if the disease spread to all of China, and the economy is affected, we might have to think about changing that scenario," said Tatsushi Maeno, senior strategist at Okasan Asset Management.
China's health authorities said the virus can pass from person-to-person. Three other countries -- Japan, South Korea and Thailand -- have confirmed cases already. .IAIRL.T were worst performer in the Tokyo bourse' 33 industry subindex. falling 2.5% on fear an epidemic would hurt travel demand.
ANA Holdings 9202.T fell 2.2% and Japan Airlines dropped 3.0% 9201.T . Travel firm H.I.S. 9603.T tumbled 5.1% while Japan Airport Terminal 9706.T , operator of Tokyo's Haneda Airport, fell 4.5%
Shiseido 4911.T , cosmetic maker that has benefitted from strong demand in China and from Chinese tourists, also dropped 3.9% to become the worst performer among the Nikkei constituents.
But anxiety over the virus outbreak has brought a windfall to some others.
Azearth 3161.T , a supplier of protective attire, jumped 16.2% to the day's limit while Airtech Japan 6291.T , which manufactures air shower and other air purifying products, gained 8.0%.
Shikibo 3109.T , which produces anti-virus mask, gained 10.8% while fiber-maker Omikenshi 3111.T jumped 16.4% to hit the daily limit.
Nippon Avionics 6946.T , which makes infrared cameras, jumped 17.1%.
Elsewhere, Maeda Road Construction 1883.T soared for a second day after its parent company Maeda Corp 1824.T said on Monday it would launch an unsolicited bid to gain a controlling stake in the road builder. of more industry consolidation have helped to lift the entire sector. The Tokyo Stock Exchange's construction company index .ICNST.T rose 0.6% to a 15-month high.
On the other hand, Toshiba Machine 6104.T tumbled 9.6% as the price of a takeover bid launched by an investment fund backed by veteran Japanese activist investor Yoshiaki Murakami fell short of market expectations. market showed a muted response to the Bank of Japan's decision to maintain its policy and revise up its growth forecasts. (Editing by Subhranshu Sahu & Shri Navaratnam)