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Nikkei flat as profit-taking offsets vaccine optimism

TOKYO, Nov 17 (Reuters) - Japanese shares were flat on Tuesday as investors booked profits following the recent surge in the benchmark index, even as news of another promising coronavirus vaccine re-ignited hopes of a swift global recovery.

The Nikkei share average, which has gained 12.6% so far this month, was nearly flat at 25,913.41 by the midday break. It briefly touched its highest since May 1991 in early trade, tracking overnight gains on Wall Street.

The benchmark index on Monday closed at a 29-year high after the economy posted its first expansion in four quarters.

“The market has been overheated by a high-paced rise, and it would be no wonder if stocks go into correction at any time in the short term,” said Maki Sawada, equity market strategist at Nomura Securities.

The S&P 500 and Dow Jones industrial average notched record closing highs on Monday after Moderna Inc said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-stage data.

The broader Topix eased 0.26% to 1,727.39. Nearly half of the 33 sector sub-indexes on the Tokyo exchange traded higher.

The airline sector led gains, rising 3.61%, with ANA Holdings and Japan Airlines adding 4% and 3%, respectively.

Other cyclical sectors followed, with insurers climbing 2.56%, miners adding 2.46% and real estate up 1.49%.

Semiconductor Tokyo Electron rose 1.2% to a record high, taking positive cues from its U.S. peers.

Nikkei’s heavyweight Fanuc Corp rose nearly 1.8%, helped by upbeat industrial output data from China and the formation of a regional trade bloc comprising 15 Asia-Pacific economies.

The Mothers Index of start-up firm shares, however, dropped 3.73%. (Reporting by Eimi Yamamitsu and Tokyo markets team; Editing by Ramakrishnan M.)

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