In a notable surge driven by renewed momentum in major technology stocks, Japan’s Nikkei 225 index briefly touched the significant 40,000 level on Friday, marking new record highs. The index experienced a more than 2% rise, reaching the milestone before retracing slightly below this level.
The substantial gains in the Nikkei were predominantly attributed to the impressive performance of technology stocks, aligning with the overnight uptrend observed in their U.S. counterparts. Investors continue to express optimism about the potential advancements in artificial intelligence, particularly anticipating significant benefits for chipmakers in the upcoming months.
The NASDAQ Composite celebrated a record-high close, propelled by robust gains in artificial intelligence frontrunner NVIDIA Corporation (NASDAQ:NVDA).
In Japan, semiconductor manufacturer Renesas Electronics Corp (TYO:6723) played a significant role in bolstering the Nikkei, surging over 5%. This surge followed the company’s announcement of plans to establish a semiconductor assembly facility in India in collaboration with India’s CG Power and Industrial Solutions Ltd (NS:CGPO) and Thailand’s Stars Microelectronics Thailand PCL (BK:SMT).
Additional gains were seen in other chipmakers, with Tokyo Electron Ltd. (TYO:8035), Japan’s most valuable chipmaker, witnessing a 4.3% increase, and Advantest Corp. (TYO:6857), a supplier to Nvidia, adding 3.1% to its value.
SoftBank Group Corp. (TYO:9984), a major tech investor and an index heavyweight, recorded a 1.8% rise. Notably, the company holds exposure to chipmaking through its British chip designing unit, Arm Holdings (NASDAQ:ARM).
The broader market sentiment received additional support from an in-line reading on the PCE price index, the Federal Reserve’s preferred inflation gauge. This development fostered hopes that the central bank might initiate interest rate cuts by June, contributing to the positive market outlook.
As technology stocks continue to fuel market optimism, the Nikkei’s ascent to the 40,000 mark underscores the significance of the tech sector in driving record highs and shaping market dynamics.