Nikkei pares early losses as investors digest risks from Omicron

TOKYO — Japanese stock index Nikkei pared almost all of its early losses on Monday, as investors tried to assess the extent of damage the Omicron variant of coronavirus could cause to the economy.

The Nikkei average was down 0.02% at 28.746.49 by the midday break, after dropping 1.4% earlier in the session.

The broader Topix stood down 0.39% at 1,977.20.

Despite the rebound from the day’s bottom, many shares remained in the red, with there being about three decliners for every advancer.

Investors are cautiously buying some shares on dip, drawing comfort from a report that a South African doctor who had treated cases said symptoms of Omicron were so far mild.

“There are worries about break-through infections but at the same time drugmakers will be working on new vaccines as well. In any case, we will know more about the new variant within a couple of weeks,” said Nobuhiko Kuramochi, market strategist at Mizuho Securities.

The top U.S. infectious disease official, Dr. Anthony Fauci, told President Joe Biden it will take about two weeks to have definitive information on the Omicron.

Travel-related sectors were undermined by concerns about more restrictions, with Tokyo Disney Resort operator Oriental Land Corp down 2.8%.

Central Japan Railway lost 1.6%, while East Japan Railway fell 0.8%.

Carmakers dropped as the yen bounced back against the dollar. Nissan Motor lost 3.8%, while Honda Motor shed 2.2% and Subaru slipped 1.8%.

On the other hand, some growth shares, which had been hit by worries about higher interest rates, saw renewed appetite from investors.

Chip-making machine maker Lasertec gained 5.1% while medical portal operator M3 rose 4.2%.

Nintendo jumped 4.3%, partly on speculation the Omicron could spur more social restriction, boosting demand for its game consoles.

(Reporting by Hideyuki Sano; Editing by Rashmi Aich)