Japanese shares trim early losses as upbeat earnings lift Canon

TOKYO, Oct 27 (Reuters) - Japanese shares pared early losses on Tuesday as strong earnings from camera and copy machine maker Canon helped counter weakness in travel and real estate stocks following a lower finish on Wall Street.

After dropping as much as 1.1% in early trade, the Nikkei share average was down 0.28% at 23,428.70 by the midday break while the broader Topix lost 0.41% to 1,612.35.

The market got support from upbeat earnings reports, with Canon jumping 6.5% after raising its annual earnings outlook and legal portal service operator reversing course to rise 6.5% on upbeat quarterly results.

Overall sentiment, however, was weaker after worries about rising coronavirus cases hit Wall Street overnight.

The airline index dropped 3.4% as investors focused on the kind of support airlines could get to survive the COVID-19 pandemic.

Japan Airline lost 3.2% as the Nikkei business daily reported it was likely to post a record net loss of about 230 billion yen ($2.20 billion) for the fiscal year ending March 2021. The company is also reportedly seeking 300 billion yen in funding.

Smaller peer Star Flyer lost as much as 7.0% after a report that it may sell new shares to a fund.

Railway operators also struggled, with West Japan Railway and Central Japan Railway falling 3.2% and 3.1%, respectively.

Real estate companies Mitsubishi Fudosan and Sumitomo Realty fell 3.5% and 2.0%, respectively.

The REIT (real estate investment trust) index fell to a three-month low before some bargain-hunting helped it erase losses to rise 0.6%.

Shares of Nidec, which have doubled from a low hit in March, dropped 1.8% even as the motor maker lifted its annual earnings estimate.

Nitto Denko also dipped 0.1% after solid earnings. (Reporting by Hideyuki Sano; Editing by Aditya Soni)