Nikkei Average Closes above 40,000 for 1st Time (UPDATE 3)
9:15 JST, March 4, 2024 (updated at 16:00 JST)
Tokyo (Jiji Press)—Japan’s benchmark Nikkei 225 stock average continued rising to close above 40,000 for the first time ever on Monday.
The Nikkei index added 198.41 points, or 0.50 pct, from Friday to finish at 40,109.23, marking a record high for the second straight market day. The Nikkei was aided mainly by purchases of semiconductor issues.
Meanwhile, the broader TOPIX index on the Tokyo Stock Exchange gave up 3.14 points, or 0.12 pct, to end at 2,706.28.
The strength of chip-linked issues came after their U.S. counterparts were bought Friday on persisting expectations for the growth of the artificial intelligence field.
But profit-taking gained steam after the Nikkei reached its intraday high of slightly above 40,300 in the morning.
“There seems to be some wariness about the speed at which stocks rose in the short term,” an official at a major securities firm said.
The Nikkei trimmed its gains to come close to 40,000 in late trading. Still, robust buying on the dip helped it finish above the threshold, market sources said.
Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui DS Asset Management Co., ruled out the view that the Nikkei’s ascent above 40,000 is a sign of the market being in a state of bubble, noting that the price-earnings ratio for component stocks is far lower than in the late 1980s during the country’s bubble-economy era.
There continues to be a “healthy” stock price formation based on improvements in corporate earnings and investor sentiment, Ishiyama said.
On the TSE’s Prime section, 425 issues finished higher while 1,195 others ceded ground. Thirty-seven stocks ended flat. Volume grew to 1,859 million shares from Friday’s 1,790 million shares.
In the semiconductor sector, Renesas Electronics jumped 4.87 pct, and Advantest 3.67 pct.
Other major winners included department store operator Isetan Mitsukoshi, up 4.56 pct.
On the other hand, shipping companies succumbed to selling pressure. Among them, Kawasaki Kisen plunged 6.66 pct.
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