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Updated January 29th, 2024 at 09:17 IST

Japan’s Nikkei bounces back on robust energy stocks, weakening Yen

Year-to-date, the index has seen a rise of 6.8 per cent. Concurrently, the broader Topix climbed by 1.26 per cent to reach 2529.20.

Business Desk
Nikkei
Nikkei | Image:Shutterstock
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The Nikkei share average in Japan experienced a rebound on Monday, largely attributed to a surge in oil prices which bolstered energy-related stocks. This increase, coupled with a weaker yen and positive performance in other Asian equities, lifted investor confidence.

During the midday close, the Nikkei surged by 0.92 per cent to reach 36,079.14, reclaiming ground in the 36,000 range following a decline at the end of the previous week. 

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Year-to-date, the index has seen a rise of 6.8 per cent. Concurrently, the broader Topix climbed by 1.26 per cent to reach 2529.20.

Energy-related companies spearheaded the market surge as oil prices escalated due to ongoing supply concerns following a missile strike on a Trafigura-operated fuel tanker in the Red Sea. 

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Inpex Corp, specialising in oil and gas production, notably gained 3.78 per cent, ranking as the second-largest percentage gainer on the Nikkei.

Within sectors, mining shares recorded a significant rise of 3.43 per cent, leading gains across the Tokyo Stock Exchange's 33 industry sub-indexes. This was closely followed by the oil and coal product shares index, which saw an increase of 3.25 per cent.

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Furthermore, the depreciation of the yen proved beneficial for exporters, with Honda Motor and Toyota Motor emerging as the top gainers among the top 30 core Topix stocks, surging by 3.85 per cent and 3.16 per cent respectively. 

Throughout the session, the dollar maintained a trading level around 148.18 yen, accentuating the advantageous impact of a weakened yen on overseas profits when repatriated to Japan.

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Market sentiment received additional support from a rally in Asian stocks led by Chinese equities. Investors are closely monitoring several key events slated for the week, including the Federal Reserve's forthcoming monetary policy decision and corporate earnings announcements.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, stressed the importance of upcoming company financial results and acknowledged potential fluctuations in the market. 

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However, he expressed confidence in the overall upward trajectory of the Nikkei, anticipating stability amidst the evolving landscape.

(With Reuters Inputs)

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Published January 29th, 2024 at 09:17 IST

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