On June 26, 2024, the Nikkei 225 Index experienced a significant rally, closing at 39,667.50, which represents a 1.26% increase from the previous day. This marks its highest closing level since April 9 and signifies a strong upward momentum in the Japanese stock market.
Key Contributors to the Performance
- Technology and Chip-Related Stocks: The primary drivers of today’s performance were technology and semiconductor-related stocks. Advantest, a major supplier to Nvidia, surged by 7%, while Tokyo Electron gained 3.6%. These two companies alone contributed 231 points to the Nikkei 225’s rise. The rally in these stocks was fueled by a strong performance in U.S. tech stocks, especially Nvidia, which provided a positive spillover effect on Japanese equities 1.
- Sector Gains: The electronic machinery sector led the gains among the Tokyo Stock Exchange’s 33 industry subindexes, rising by 1.4%. This sectoral strength indicates a broad-based rally within the technology space, further underpinning the overall index’s performance.
- Dividend Reinvestments: Another factor contributing to the rally was the reinvestment of dividend payouts into the market. As Japan pushes for corporate governance reforms, increased dividend payments have provided additional support to share prices. These reforms have been a significant factor in helping the Nikkei reach an all-time peak earlier in the year.
Broader Market Context
The broader Topix index also finished up by 0.56% to 2,802.95, echoing the positive sentiment in the market. Despite mixed performances in the broader Asian markets, the buoyancy in U.S. tech stocks created a strong tailwind for Japanese equities. Market participants are also awaiting further clarity on the Bank of Japan’s monetary policy path, which adds an element of cautious optimism to the market outlook 3.
Notable Movements Among Heavyweights
Among other notable stocks, Fast Retailing rose by 1%, SoftBank Group gained 1.6%, and TDK Corporation was up by 2.5%. These gains among heavyweight stocks further bolstered the index, reflecting a widespread positive sentiment across various sectors.
In conclusion, the Nikkei 225’s performance on June 26, 2024, underscores a robust market driven by technology and semiconductor gains, dividend reinvestments, and positive spillovers from U.S. tech stocks, marking a significant milestone in its recent trading history.
