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Japanese shares give up early gains as investors book profits

09/27/2021 | 02:59am EST

TOKYO, Sept 27 (Reuters) - Japanese shares settled slightly lower on Monday, giving up early gains driven by cyclical stocks as investors booked profits after a sharp rally this month, while caution also prevailed ahead of a change in political leadership.

The Nikkei share average closed down 0.03% at 30,240.06 after rising as much as 0.5%. The broader Topix slipped 0.14% to 2,087.74.

The Nikkei has risen almost 8% this month on hopes of an economic recovery amid declining cases of COVID-19 infections.

"Early gains were erased as investors tried to lock in profits after a big rally until last week," said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

"The sell-off was driven by caution ahead of a change in political leadership, while there are still fears of possible default by China Evergrande."

Japan's ruling Liberal Democratic Party is set to hold an election to choose a new leader, who is set to become the country's next prime minister.

Stocks with an exposure to China continued to be hit as fears of a potential default at China Evergrande loomed. Air-conditioner maker Daikin Industries fell 3.44% and toilet maker Toto slipped 1.84%.

Shippers led the decline among the Tokyo Stock Exchanges 33 industry sub-indexes with a drop of 6.45%.

Shares of companies that benefited from the stay-at-home lifestyle were subdued, after the health minister said the COVID-19 infection situation was improving such that emergency conditions could soon be lifted in most parts of the country.

Gamemaker Bandai Namco lost 2.81% and frozen food maker Ajinomoto fell 2.27%.

Shares that would benefit from an economic reopening advanced, with airlines jumping 3.76% and railway operators rising 1.69%.

Department stores rose, with Takashimaya up 4.04%, Isetan Mitsukoshi gaining 3.66% and Marui Group advancing 2.82%. (Reporting by Junko Fujita; Editing by Rashmi Aich and Subhranshu Sahu)

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AJINOMOTO CO., INC. 1.46% 3486 End-of-day quote.49.13%
BANDAI NAMCO HOLDINGS INC. -2.30% 9053 End-of-day quote.1.42%
CHINA EVERGRANDE GROUP -10.39% 2.5 End-of-day quote.-83.22%
DAIKIN INDUSTRIES,LTD. -1.88% 23975 End-of-day quote.4.60%
ISETAN MITSUKOSHI HOLDINGS LTD. -4.12% 815 End-of-day quote.33.61%
MARUI GROUP CO., LTD. -5.18% 2198 End-of-day quote.21.30%
TAKASHIMAYA COMPANY, LIMITED -3.59% 1048 End-of-day quote.18.42%
TOTO LTD. -2.63% 5190 End-of-day quote.-16.29%
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