Japan’s Nikkei share average shot back up on Thursday to its highest level in 34 years, while chip-related shares and a rebound on Wall Street giving most other Asian markets a helpful lift.
Taiwan stocks jumped by over 3%, thanks to shares of TSMC rising 8% to an all-time high after Morgan Stanley boosted the price target on US chipmaker Nvidia.
Elsewhere across the region, the ASX in Sydney rose by 0.77%, the Hang Seng Index was up 0.4%, and the Nifty 50 in Mumbai climbed by 0.32%,
Meanwhile, markets in Indonesia enjoyed a boost from news that Prabowo and other members of the current government look set to dominate the next administration.
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Nikkei close to record peak
In Tokyo, the Nikkei benchmark rose by 1.2% to 38,157.94 – its highest close since January 1990 and just 800 points, or 2%, below its all-time high since December 29, 1989.
A weak yen, which boosts exporter profits, also supported the Nikkei amid a continued outlook for dovish monetary policy, as Japan unexpectedly slipped into a recession at the end of last year.
“I can’t believe we’d come this far and not have a look at those all-time highs,” said Tony Sycamore, a markets analyst at IG, flagging the potential for a test of the level by end-March.
“Into the Japanese financial year-end, the Nikkei generally does well…But if it misses out, then we’ll have to look towards the middle of the year,” with the Nikkei tending to retreat at the start of the new fiscal year in April, he added.
Chip-related shares provided the Nikkei with an outsized lift, taking cues from a 2.2% jump in the Philadelphia SE Semiconductor Index overnight, outpacing rallies for the main three Wall Street benchmarks.
Chip-making equipment giant Tokyo Electron contributed the most, 168 index points with a 5% jump. Artificial intelligence-focused startup investor SoftBank Group provided a 59-point boost, jumping 3.59%.
Corporate earnings produced some outsized winners and losers, with green energy company Ebara and e-commerce company Rakuten Group surging nearly 16%, each. Toy company Bandai Namco tumbled more than 15%.
The yen’s slide below 150 per dollar this week has been broadly supportive, as it boosts the value of overseas revenues and makes products more competitive.
The domestic currency has been weighed down by comments from top Bank of Japan officials that even if negative short-term interest rate policy is removed in coming months, further rate hikes are likely to be slow.
Hong Kong and India stocks advance
Meanwhile, MSCI’s broadest index of Asia Pacific shares outside of Japan rose 0.7% with the IT index surging more than 2%.
Hong Kong’s Hang Seng Index eased 0.67% in early trading but was up by 0.4% at the end of trading.
China’s other markets are closed for the week due to the Lunar New Year holiday.
On Wednesday Wall Street ended sharply higher as ride-hailing platforms Lyft and Uber rallied, while Nvidia displaced Alphabet as the US’s third most valuable company.
Indian shares advanced on Thursday, led by a rally in energy and public sector banks, and supported by a post-results jump in Mahindra & Mahindra.
The NSE Nifty 50 index settled 0.32% higher at 21,910.75, while the S&P BSE Sensex gained 0.32% to 72,050.38.
Both the benchmarks struggled for direction earlier in the day, before consolidating gains in the final two hours.
Indian markets have remained resilient to hot US inflation data, released on Tuesday, unlike Asian peers, which fell in the previous session.
The benchmark Nifty 50 has added 1.36% in the last three sessions.
“US inflation data was a clear indicator that rate cuts will be delayed. That triggered foreign selling but domestic flows have been extremely robust, supporting the markets,” Anita Gandhi, founder and head of institution at Arihant Capital, said.
Domestic institutional investors have bought 135.45 billion rupees (about $1.6 billion) of shares on a net basis in February so far, cushioning sales of 111.07 billion rupees by foreign institutional investors on a net basis.
Public sector banks jumped 3.27%, taking gains in the last three sessions to about 8%.
Energy and oil and gas gained 1.75% and 2.46%, respectively, on the day, sustaining their post-results rally.
Auto stocks advanced 1.35%, led by Mahindra & Mahindra, which jumped 6.52% as analysts expected profitability to remain steady for the company.
In other news, the dollar index, which measures the US currency against six rivals, eased 0.01% to 104.67 but remained near the three-month high of 104.97.
Bitcoin rose to its highest since December 2021 and was last at $52,020 with the total value invested in bitcoin surpassing $1 trillion on Wednesday for the first time since November 2021 on strong inflows.
US crude fell 0.47% to $76.28 per barrel and Brent was at $81.26, down 0.42%.
- Reuters with additional editing by Jim Pollard
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