July 16, 2020 / 7:45 AM / a month ago

Japanese shares close weaker as domestic COVID-19 cases spike

TOKYO, July 16 (Reuters) - Japanese shares ended lower on Thursday as worries over a surge of domestic coronavirus cases dampened hopes for a swift economic recovery.

The benchmark Nikkei shares average closed 0.76% lower at 22,770.36, retreating from a five-week high hit in the previous session. There were 126 advancers against 95 decliners in the index.

The market started the session downbeat on profit-taking, but losses were extended after the midday break as Tokyo Governor Yuriko Koike said COVID-19 cases were likely to exceed 280 on Thursday. A day earlier, the metropolis raised its coronavirus alert to the highest level.

As COVID-19 cases continue to rise at home and abroad, “investors are now having doubts about whether economic recovery will actually happen as expected by the market,” said Shuji Hosoi, senior market strategist at Daiwa Securities in Tokyo.

Even robust China data showing the world’s second-largest economy rebounded more than expected in April-June from a record contraction did little to lift market sentiment.

Pharmaceutical, electronic and gas and info and telecom were the three worst performers on the main bourse.

Semiconductor issues underperformed, with Screen Holdings Co Ltd dropping 4.17%, while Advantest Corp and Tokyo Electron Ltd eased 2.68% and 2.55%, respectively.

Among gainers, Japan Exchange Group Inc jumped 6.51% after Nikkei Inc said it would add the stock to the Nikkei average from July 29, replacing Sony Financial Holdings Inc .

The broader Topix lost 0.66% to 1,579.06, with nearly half of the 33 sector sub-indexes on the Tokyo exchange trading lower. (Reporting by Eimi Yamamitsu; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

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