March 5, 2020 / 6:59 AM / a month ago

Japan stocks rise by most in one month, caution about virus remains

* Tracking the coronavirus: tmsnrt.rs/3aIRuz7

* Healthcare sector shines on virus drug development

* Stocks still have downside risks due to coronavirus

By Stanley White

TOKYO, March 5 (Reuters) - Japanese shares posted their biggest one-day percentage gain in a month on Thursday, tracking a surge on Wall Street following strong showing by Joe Biden in Democratic primaries and robust data that lifted sentiment amid a rise in coronavirus cases.

The Nikkei index ended 1.09% higher at 21,329.12, boosted by the healthcare and industrial sectors.

Former Vice President Biden is now leading the race for the Democratic Party’s presidential nomination, and his economic policies are considered more benign than main rival Bernie Sanders.

U.S. data that showed strong private sector hiring and robust growth in the services sector added to the upbeat mood.

However, many investors warned that the recent sell-off due to the global spread of the coronavirus could quickly return because the flu-like illness has not yet been contained.

The virus emerged in China late last year but has since spread to some 80 countries, with infections in Japan topping 200 and deaths totalling six. That excludes more than 700 cases and five more deaths from a quarantined cruise liner.

“Japanese stocks are very close to book value, so you really can’t sell any further from here,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.

“However, a strong rally is unlikely unless we see a lot more positive news about the state of the virus in Japan.”

There were 137 advancers on the Nikkei index against 79 decliners on Thursday.

Takeda Pharmaceutical Co Ltd rose 3.51% after the company said it was developing a drug for the virus, boosting shares in peers.

The largest percentage gainers were drugmaker Kyowa Kirin Co Ltd up 4.51%, followed by food and drugmaker Meiji Holdings Co Ltd gaining 4.23%. Industrial conglomerate Hitachi Ltd advanced 4.18%.

The largest percentage losers were aluminium maker Nippon Light Metal Holdings Co Ltd, down 2.63%. Construction company Shimizu Corp slipped 2.1%, while truck maker Hino Motors Ltd dropped 1.9%.

Some traders now await the U.S. non-farm payrolls data due on Friday to gauge the health of the world’s largest economy.

The broader Topix index rose 0.88% to 1,515.71.

The volume of shares traded on the Tokyo Stock Exchange’s main board was 1.38 billion, compared to the average 1.36 billion in the past 30 days. (Editing by Subhranshu Sahu and Sriraj Kalluvila)

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