Japanese shares bounce back as defensive stocks gain

TOKYO, Aug 18 (Reuters) - Japanese shares bounced back on Wednesday, led by gains in Fujifilm and other defensive stocks, while concerns about Delta variant kept many investors on guard.

Nikkei average rose 0.57% to 27,579.84, erasing earlier losses to its lowest level since July 30 after four straight days of losses.

The broader Topix also rose 0.54% to 1,925.98.

The gains were led mainly by defensive shares while many cyclical shares slipped on continued worries the spreading Delta variant could disrupt the economic recovery, both at home and abroad.

Fujifilm rose to a record high, extending its rally since its brisk earnings announced on Friday.

Some defensive shares such as pharmaceutical companies were also among the top gainers, with Astellas Pharma up 2.7% and Chugai Pharmaceutical gaining 2.0%.

But many cyclical shares fell on rising growth concerns as many countries struggled to contain Delta variant of the coronavirus.

Securities brokerage firms fell 0.2% while steelmakers lost 0.4%. Shippers, which had risen about 50% in less than three weeks on the back of a red-hot freight market, lost 3.0%.

“There are rising worries the world economy could slow down next year due to variant,” said Masayuki Kubota, chief strategist at Rakuten Securities.

U.S. retail sales fell more than expected in July while Japan on Tuesday extended its state of emergency in Tokyo and other regions and to counter a spike in COVID-19 infections that is threatening the medical system.

Pan Pacific International lost 6.7% after the retailer’s quarterly earnings fell short of market expectations.

Shippers dropped after their colossal gains over the past few weeks. (Reporting by Hideyuki Sano; Editing by Krishna Chandra Eluri)