(MENAFN) In Thursday's trading session, Japan's Nikkei index saw a notable uptick, marking its first positive movement in four consecutive sessions. This reversal was driven by a turnaround in the chip sector stocks, which initially faced losses, and a concurrent rise in banking stocks. The Nikkei managed to climb by 0.31 percent to reach 38,079.70 points by the session's close, rebounding from an early dip of 0.83 percent. Surpassing the crucial threshold of 38,000 points, the index displayed resilience in the face of recent market challenges.
Despite this day's recovery, the Nikkei index still recorded a weekly decline of 3.65 percent, marking its most significant drop since December 2022. Nonetheless, the broader Topix index managed to reverse its early losses and closed with a gain of 0.54 percent. Analysts attribute the initial week's decline to profit-taking behavior among investors, particularly considering the Japanese market's robust performance since the start of the year.
Kenji Abe, an equity expert at Daiwa Securities, highlighted the high profitability of Japanese stocks as a key factor supporting his optimistic outlook. He acknowledged the natural tendency for investors to capitalize on gains, leading to the earlier decline this week. Despite this, Abe expressed confidence in the market's trajectory, anticipating the Nikkei index to reach 43,000 points within the next twelve months.
Reflecting on the broader trend, the Nikkei index has sustained a positive performance over the year, boasting a 13.79 percent increase. However, it experienced a setback from its record peak of 41,087.75 points on March 22, with a subsequent decline of 7.61 percent leading up to Wednesday's close. The ongoing profit-taking season commenced with early reports from retail companies earlier this month. Looking ahead, technology company reports are slated for release next week, with the peak of earnings announcements expected in mid-May.
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