Nikkei rockets to all-time peak as Nvidia optimism drives chips rally
22/02/2024 07:22
(Adds Nikkei decliners in 11th paragraph)
TOKYO, Feb 22 (Reuters) - Japan's Nikkei share average
surged to a record high on Thursday, eclipsing the 1989
bubble-era peak, as chip-related stocks led across-the-board
gains after U.S. chipmaker Nvidia's outlook beat market
expectations.
The Nikkei .N225 closed up 2.19% at 39,098.68, having
earlier risen to a high of 39,156.97, topping the previous
all-time closing and intraday highs set on Dec. 29, 1989, at the
peak of the nation's bubble economy.
The previous intraday high for the index was 38,957.44 and
closing high was 38,915.87.
Japan's benchmark has rocketed about 52% from its January
2023 trough, supercharged by a tech-rally, corporate governance
changes and rising exporters' profits thanks to a weak yen.
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Nvidia shares surged 6% overnight after it forecast fiscal
first-quarter revenue above estimates on robust demand for its
chips that dominate the market for artificial intelligence (AI).
"For us traders, this marks the arrival of a new era," said
Tsutomu Yamada, senior market analyst at au kabu.com Securities.
"It feels like the stock market is telling us that we've
finally escaped from deflation and a new world has opened up."
Tokyo Electron 8035.T jumped 6% to give the biggest boost
to the Nikkei, while chip-testing equipment maker Advantest
6857.T surged 7.5%.
Another chip-related share, Screen Holdings 7735.T ,
rallied more than 10%, while start-up investor SoftBank Group
9984.T rose more than 5%.
Electric machinery .IELEC.T rose 2.4% to be the biggest
gainer among the Tokyo Stock Exchange's 33 industry sub-indexes.
Of the 225 components in the Nikkei, 170 stocks rose and
54 fell, with one flat. The drug sector .IPHAM.T led losers,
down 0.59%.
Some traders are betting on the Nikkei to rally further.
"I expect the 40,000 level to become the market's next
objective for the Nikkei, said Tony Sycamore, market analyst at
IG in Sydney.
"If momentum names really start to get involved and add to
positioning on the break of the 1989 high, we could see a
blow-off type move in the short term towards 42,000."
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Japan's Nikkei share average crosses all-time high https://reut.rs/49Ck96k
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(Reporting by Junko Fujita
Editing by Shri Navaratnam)
((junko.fujita@thomsonreuters.com;))