Japan’s Nikkei Rises over 1% on Rally in Chip Shares

Yomiuri Shimbun file photo
Tokyo Stock Exchange

TOKYO (Reuters) – Japan’s Nikkei share average rose more than 1% on Thursday as investors scooped up beaten-down stocks, with chip-related shares leading the gains.

By 0222 GMT, the Nikkei index was up 1.4% at 32,378.16, on track to rise for a third straight session.

The broader Topix had gained 1.17% to 2,335.20.

“The market was firm overall. Investors bought back stocks that fell in recent sell-offs. They realized that the fundamental for Japanese economy has not changed,” said Ikuo Mitsui, fund manager at Aizawa Securities.

The Nikkei hit a more than four-month low last week, losing nearly 10% from a 33-year high scaled in mid-June amid concerns about rising U.S. Treasury yields.

“Investors also bought growth stocks, mainly chip-related shares, after earnings of Samsung (Electronics) indicated the industry’s performance hit the bottom,” Mitsui said.

Samsung Electronics on Wednesday said its preliminary third-quarter profit dropped by a smaller-than-expected 78%, as the battered memory chip market shows early signs of recovering from a severe downturn.

Japan’s chip-making equipment maker Tokyo Electron 8035.T rose 2.8% to become the biggest boost for the Nikkei, followed by chip-testing making equipment maker Advantest, which jumped 3.54.%.

Chip-related product maker Lasertec climbed 4.33% and chip-maker Renesas Electronics rose 4.50%.

Medical equipment maker Olympus lost 1.38% to become the worst performer on the Nikkei.

Energy explorers lost 1.48% to become the worst performer among the 33 industry sub-indexes on the Tokyo Stock Exchange, as oil prices fell O/R

Refiners lost 0.98%.