Japan's Nikkei retakes 39,000 level for first time since mid-April

Shin-Etsu Chemical Co

20/05/2024 07:44

(Updates with closing levels)
    By Brigid Riley
       TOKYO, May 20 (Reuters) - Japan's Nikkei share average
rose on Monday, hitting 39,000 points for the first time in a
month, as higher expectations for U.S. interest rate cuts
continue to keep market sentiment upbeat. 
    The Nikkei  .N225  closed 0.73% higher at 39,069.68, jumping
over 1% during trading before profit-taking set in. It was the
first time the benchmark index reached the psychologically
significant 39,000-point range since April 15. 
    The broader Topix  .TOPX  was up 0.82% at 2768.04.
    A milder inflation report last week has investors once again
pricing in U.S. rate cuts as early as September, buoying global
market sentiment and in turn boosting Japanese equities.
    Wall Street, which Japan's stock market tends to track, saw
stock indexes lock in weekly gains despite ending mixed on
Friday. The Dow Jones Industrial Average  .DJI  closed at a
record high.  .N 
     Futures of U.S. stock indexes were also up during Tokyo
trading time, which may also have provided investors with a
"sense of confidence," said Masahiro Ichikawa, chief market
strategist at Sumitomo Mitsui DS Asset Management.
    The Nikkei hit an all-time high of 41,087.75 earlier this
year before falling nearly 5% last month in its largest monthly
drop since December 2022. It is up about 16% this year.
    On Monday, buying was widespread, with 183 of the index's
225 constituents advancing. Gains narrowed, however, as
investors sought to lock in profits.
    Among individual shares, Fast Retailing  9983.T  was up
0.9%, and chip-making equipment giant Tokyo Electron  8035.T 
gained 0.7%.
    Shin-Etsu Chemical  4063.T , which manufactures chip silicon
products among other things, jumped 4.2%.
    AI-focused startup investor SoftBank Group  9984.T  fell
2.8%.
    Advantest  6857.T , which counts U.S. artificial
intelligence firm Nvidia among its customers, edged down 0.4% as
investors awaited Nvidia's revenue results due later this week. 
  
    "If the market perceives (Nvidia's) outlook as better than
expected, ...it will react with a rally in chip-related shares,
not just in the U.S. but also in Japan," said Ichikawa.

 (Reporting by Brigid Riley; Editing by Sohini Goswami and
Krishna Chandra Eluri)
 ((brigid.riley@thomsonreuters.com;))