Updated February 13th, 2024 at 09:35 IST

Nikkei hits 34-year high on strong chip shares, earnings

The broader Topix also saw an uptick of 1.85 per cent.

Reported by: Business Desk
Nikkei | Image:Shutterstock
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Nikkei zooms: Tokyo's Nikkei share average surged to its highest level in 34 years on Tuesday as trading resumed following a long holiday weekend.

The benchmark stock index was buoyed by gains in tech-related shares and robust corporate earnings.

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The Nikkei climbed 2.44 per cent to reach 37,798.89 by the midday close, marking its highest level since February 1990. Of the index's 225 constituents, 185 recorded gains while 39 declined. 

The broader Topix also saw an uptick of 1.85 per cent.

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Japanese markets remained closed on Monday for a national holiday, but trading resumed with enthusiasm on Tuesday.

"The Nikkei rally has got an extra bump higher with ARM Holdings being the latest addition to the AI frenzy after strong results last week," said Charu Chanana, head of currency strategy at Saxo Markets.

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ARM Holdings saw its shares surge since Wednesday after the company forecasted better-than-expected quarterly results, driven by demand for its technology used in designing chips for artificial intelligence applications. 

SoftBank Group Corp, which holds a 90 per cent stake in ARM Holdings, experienced a 6.93 per cent rise in its shares on Tuesday.

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Tokyo Electron, a leading player in the chip sector, gained 11.24 per cent, making it the second-best performer of the day.

The Japanese equities market also received a boost from Wall Street, where the Nasdaq briefly surpassed its record closing high from November 2021.

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Among the top gainers were insurance firms MS&AD Insurance Group Holdings and Tokio Marine Holdings, which saw increases of 11.42 per cent and 10.25 per cent, respectively. MS&AD Insurance was the best performer.

However, some companies experienced declines. 

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Otsuka Holdings fell 6.91 per cent after the company announced that its experimental drug failed to meet the primary late-stage trial goal in treating agitation associated with dementia due to Alzheimer's disease.

JGC Holdings Corp was the biggest decliner of the day, falling 17.72 per cent, followed by Nippon Paper Industries Co Ltd, which lost 14.58 per cent, and Mazda Motor Corp, down by 7.5 per cent.

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(With Reuters Inputs)

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Published February 13th, 2024 at 09:35 IST