Japan’s Nikkei Rises on Nvidia Bump; Profit-Taking Caps Gains (Update 1)

Reuters

12:47 JST, June 19, 2024 (updated at 16:30 JST)

TOKYO, June 19 (Reuters) – Japan’s Nikkei share average ended higher on Wednesday, tracking an overnight Wall Street rally in semiconductor stocks, although profit-booking limited gains.

Japan’s technology shares had rallied in the morning, following gains in U.S. chip star Nvidia, which overtook Microsoft to become the world’s most valuable company overnight. The Philadelphia Semiconductor index also climbed more than 1%.

The Nikkei closed 0.23% higher at 38,570.76, while the broader Topix finished up 0.47% at 2728.64.

“There were some concerns last week about political risk in Europe and the Nikkei also declined. But since the beginning of this week, U.S. and European shares have steadied, and Nvidia performed strongly,” said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

The combination has improved sentiment, he said.

But profit-taking limited the Nikkei’s gains in the afternoon, with the U.S. markets being closed on Wednesday for a public holiday, sending the index at times into negative territory.

While sentiment was lighter after some of the uncertainty weighing on the market last week was dispelled, there weren’t enough drivers to push the index higher, said Maki Sawada, an equities strategist at Nomura Securities.

“It was an easy environment for position adjusting to set in.”

Mitsubishi Motors jumped about 9% to become the top gainer on the Nikkei. The auto firm’s president indicated in an interview with the Nikkei newspaper that the company might buy back shares for the first time in 18 years and increase shareholder returns in fiscal year 2025.

Fellow auto manufacturer Mazda Motor rose 3.6%.

Chip-testing equipment maker Advantest, which counts Nvidia among its customers, climbed 4.1% to become the second-biggest gainer, adding 57.5 points to the Nikkei’s near 89-point gain.

AI-focused startup investor SoftBank Group gained 1%.

Cosmetic company Shiseido slid 4.8%.