Nikkei ends higher, but sees worst week in 6 months as virus spreads

TOKYO, Jan 31 (Reuters) - Nikkei closed higher on Friday as some upbeat corporate earnings and forecasts helped, although the benchmark recorded its worst weekly slide in six months on fears of the rapidly-spreading coronavirus in China.

The Nikkei share average ended 1.0% higher at 23,205.18, but lost 2.6% in the week. January’s fall of 1.9% was its first monthly loss since August last year.

The broader Topix closed up 0.6% at 1,684.44 to end a punishing week.

Investors remained on the edge over how much the virus could disrupt the global economy, with the World Health Organisation (WHO) declaring it a global health emergency.

“Although I’m not denying the possibility that this coronavirus outbreak may hurt the economy, I think it has only limited and short-lived impact on Japan’s stock market,” said Archibald Ciganer, co-head of Japanese equity at T.Rowe Price.

“It has provided buying opportunities for some investors. But I would say, it is an ‘already done’ theme.”

Indeed, it appears to be a classic “buy on the rumour, sell on the fact” situation, traders said, adding that some short-term players saw the WHO’s declaration as a cue to buy back shares.

Driving sentiment on Friday were a slew of upbeat corporate earnings results from Japanese companies.

Fujitsu Ltd soared 12% to an 18-year high after the information technology conglomerate raised its profit and dividend forecasts, and announced a share buyback.

Anritsu Corp jumped 7.8%, also on upbeat earnings due to strong 5G-related demand.

Strong earnings also boosted Chugai Pharmaceutical Co Ltd , the second-biggest Japanese drugmaker by market cap, by 7.6%.

On the other hand, Nintendo Co Ltd closed at a three-month low on profit-taking. The gaming company posted its highest quarterly profit in 10 years on strong demand for Switch and raised the full-year sales forecast of the console.

Electronic parts maker Alps Alpine Co Ltd dived 10.9% after it cut its profit and dividend estimates for the year to March.

Car parts maker Denso Corp lost 0.9% after it cut profit outlook.

Chip-making machine maker Screen Holdings slid 6.5% after declining by its daily limit of 19.3% on Thursday, following surprise downgrades to its earnings estimates.

Reporting by Tomo Uetake & Hideyuki Sano; Editing by Subhranshu Sahu and Uttaresh.V