May 7, 2020 / 7:32 AM / a month ago

Transport stocks pull Tokyo shares lower as state of emergency extends

SYDNEY, May 7 (Reuters) - Japanese shares eased on their return from a long holiday on Thursday, with airlines declining the most, as sentiment was dampened by Tokyo's move to extend a state of emergency and dour U.S. economic data.

The broader Topix index dropped 0.32% to 1,426.73, with air transport and land transport among the worst three performing sectors on the local bourse, down 6.8% and 2.9%, respectively.

Japan extended a nationwide state of emergency on Monday, underscoring expectations that travel demand was unlikely to recover anytime soon.

Markets in Japan were closed from Monday through Wednesday for a string of national holidays.

On Thursday, Japan Airlines shed 6.9% and ANA Holdings lost 6.7% as U.S. peers plunged earlier this week on news that billionaire Warren Buffett had sold his entire stakes in the top four U.S. carriers.

"The world has changed" for the aviation industry, Buffett said at Berkshire Hathaway's annual meeting on Saturday.

Underlining the impact of the coronavirus outbreak, data showed overnight that U.S. private employers laid off a record 20.236 million workers in April.

Sentiment was also weighed down by renewed U.S.-China tensions after President Donald Trump threatened Beijing with new tariffs over its early handling of the novel coronavirus.

Meanwhile, the blue-chip Nikkei average edged up 0.28% to 19,674.77, helped by gains in semiconductor-related stocks.

Chipmaking gear manufacturer Tokyo Electron Ltd rose 3.2% and test device maker Advantest Corp climbed 3.3%, tracking gains in U.S. peers.

Nintendo Co Ltd gained 3.3% after media reports that the gaming company sold more than 5 million digital copies of its latest game release of "Animal Crossing: New Horizons" in March.

The Nikkei's heavyweight SoftBank Group Corp fell 2.5% after WeWork co-founder Adam Neumann filed a lawsuit against the tech conglomerate and its Vision Fund for terminating a $3 billion tender offer to the office-sharing startup's shareholders.

Canon Inc declined 3.0% after it said President Masaya Maeda had retired for health reasons and Chairman Fujio Mitarai would concurrently serve as president and chief operation officer.

The index of Mothers start-up shares jumped 6.5% to its highest close since Feb. 14, with biopharma AnGes Inc soaring 24.7% to hit the daily limit on hopes for its DNA vaccine against COVID-19.

Nomura Real Estate Holdings surged 6.2% after posting a 6.6% increase in net profit for the year ended March.

"I expect this two-day week to be rather quiet ahead of the U.S. non-farm payrolls release (due on Friday) and huge earnings next week," said Takeo Kamai, head of executions services at CLSA in Tokyo. (Reporting by Tomo Uetake; Editing by Subhranshu Sahu, Aditya Soni)

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