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

* 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

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 after hitting its highest level since June 1991 during the session. The broader Topix gained 1.12% to 1,700.80. Turnover jumped to 4.075 trillion yen, the biggest in five months.

Airliner ANA Holdings jumped 18.1%, while the country’s three big railway operators — East Japan Railway , West Japan Railway and Central Japan Railway — all vaulted about 15%.

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

Drugmaker Pfizer and German partner BioNTech SE said their experimental COVID-19 vaccine was more than 90% effective based on initial trial results.

Topix Value index rose 3.2% as financials benefited from a surge in U.S. bond yields while other “old economy” shares, such as steelmakers, 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 lost 8.1%, while Nintendo shed 4.5%. Internet firm Z Holdings tumbled 7.6% while medical service platform operator M3, one of the market’s best performers this year, dropped 7.3%.

Mothers start-up shares, another high-flyer this year, fell 6.4%, its biggest fall in eight months. (Additional reporting by Tomo Uetake in Sydney, Editing by Uttaresh.V and Devika Syamnath)

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