Japan’s Nikkei Hits 34-Year High on Tech Surge and Strong Earnings
Tokyo, Japan – Japan’s Nikkei share average soared to a fresh 34-year high on Tuesday as trading resumed after a long holiday weekend, driven by a rally in tech-related shares and robust corporate earnings. The benchmark stock index, the Nikkei, surged 2.44% to reach 37,798.89 by the midday close, marking its highest level since February 1990. Out of the index’s 225 constituents, 185 saw gains while 39 declined. The broader market also rose by 1.85%.
“The Nikkei rally has got an extra bump higher with ARM Holdings being the latest addition to the AI frenzy after strong results last week,” revealed Charu Chanana, head of currency strategy at Saxo Markets. The hot streak from ARM Holdings, which predicted better-than-anticipated quarterly results on high demand for its chip design technology used in artificial intelligence features, saw its shares surge. As a result, SoftBank Group Corp, which holds a 90% stake in ARM Holdings, experienced a 6.93% rise on Tuesday. Tokyo Electron Ltd, a major player in the chip sector, also performed well, gaining 11.24% and becoming the second-best performer.
Wall Street’s positive performance additionally bolstered Japanese equities. Insurance firms MS&AD Insurance Group Holdings and Tokio Marine Holdings experienced significant gains, with a rise of 11.42% and 10.25% respectively. Among these, MS&AD Insurance emerged as the best performer.
However, not all companies enjoyed the upbeat sentiment. Otsuka Holdings suffered a setback, shedding 6.91% after announcing that its experimental drug failed to meet the primary goal in a late-stage trial for treating agitation linked to Alzheimer’s disease. JGC Holdings Corp languished at the bottom of the pack, plunging 17.72%, followed by Nippon Paper Industries Co Ltd, which dropped by 14.58%, and Mazda Motor Corp, down by 7.5%.
Overall, the tech rally and robust corporate earnings proved to be key drivers behind Japan’s Nikkei hitting a remarkable 34-year high. As the market continues to show strength, investors are keeping a close eye on how these factors will shape the future performance of Japanese equities.
Note: All figures mentioned are based on data at the time of writing.
Analyst comment
Positive news. The Nikkei hit a 34-year high due to a surge in tech-related shares and strong corporate earnings. The market is expected to continue performing well as investors monitor these factors.
