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Company News

Japan shares close at 29-year high on GDP rebound, vaccine race

TOKYO, Nov 16 (Reuters) - Japanese stocks touched a 29-year high on Monday after the economy posted its first expansion in four quarters and as progress in developing a COVID-19 vaccine continued to lift global markets.

The Nikkei 225 Index ended 2.05% firmer at 25,906.93, its highest close since June 1991. The broader Topix gained 1.68% to 1,731.81.

Japan’s economy grew at a faster-than-expected annualized rate of 21.4% in July-September, which follows a 28.8% plunge in April-June.

Sentiment also got a boost after China data showed that factory output in the world’s second-largest economy rose faster than expected last month and retail sales sped up, as the recovery from its COVID-19 slump gathered momentum.

Vaccine optimism outshone worries about rising COVID-19 cases globally, with news from Johnson & Johnson giving markets a further lift. The U.S. drugmaker launched a late-stage trial of its vaccine on Monday, which follows promising developments last week from Pfizer and Moderna Inc .

Though some analysts advise caution as the United States and Europe are reintroducing restrictions to contain a surge in new infections, which could increase market volatility.

“There might be some correction in the short term, but the news that several vaccines are in late-stage development suggests the downside is limited,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co.

The stocks that gained the most among the top 30 core Topix names were Honda Motor Co Ltd up 4.84%, followed by Mitsubishi UFJ Financial Group Inc up 3.48%.

The underperformers among the Topix 30 were Nintendo Co Ltd down 1.91%, followed by Takeda Pharmaceutical Co Ltd that lost 0.97%.

Shares of Rakuten rose 1.19% after the internet commerce company said it will team up with private equity firm KKR to buy a controlling stake in Japanese retailer Seiyu.

There were 205 advancers in the Nikkei index against 19 decliners.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.41 billion, compared with the average of 1.12 billion in the past 30 days. (Reporting by Stanley White, Editing by Sherry Jacob-Phillips)

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