Friday, July 19, 2024

Nikkei Index in Japan Increases as Tech Stocks Follow US Market Growth (Update 1)

Japan’s Nikkei Share Average Rises for Fourth Consecutive Day

The Nikkei share average in Japan continued its upward trend, rising for a fourth consecutive day on Wednesday. The index gained 1.26% to close at 40,580.76, while the broader Topix also saw gains, closing up 0.54% at 2,872.18.

The positive performance was attributed to the strong showing of heavyweight technology stocks, which closely followed the overnight gains in U.S. megacap growth stocks. Wall Street’s main indexes also closed higher on Tuesday, with Tesla and other megacap growth stocks leading the way.

According to Naoki Fujiwara, senior fund manager at Shinkin Asset Management, investors were seen rotating their targets, selling outperforming shares to take profits and buying cheaper stocks. This shift, along with latecomers buying Nikkei futures, helped lift the main index.

Among the notable gainers were chip-making equipment maker Tokyo Electron, which rose 2.6%, and chip-testing equipment maker Advantest, which gained 2.38%. Electronic components maker TDK also jumped 5.24%, while silicon wafer maker Shin-Etsu Chemical climbed 2.22%.

On the other hand, companies like Hitachi, Tokio Marine Holdings, and Toyota Motor saw declines, weighing on the Topix index. Despite this, the overall market sentiment remained positive, with 59% of shares rising, 37% falling, and 2% remaining unchanged on the Tokyo Stock Exchange.

The machinery sector emerged as the top performer among the TSE’s 33 industry sub-indexes, rising by 2.2%. With investors closely watching the release of June nonfarm payrolls on Friday, the market is expected to see continued volatility in the coming days.

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