Nikkei hits 2-month high as investors turn to stock valuation amid weaker yen
Date
6/26/2024 4:34:18 AM
(MENAFN) On Tuesday, Japan's NIKKEI index surged to its highest closing level in over two months, driven by a strategic shift among investors towards value Stocks and away from semiconductor and high-tech companies. The Nikkei index rose by 0.95 percent to close at 39,173.15 points, marking its highest level since April 15. The broader Topix index also saw significant gains, increasing by 1.72 percent to close at 2,787.37 points.
This shift in investor focus came as sentiment towards artificial intelligence and semiconductor stocks remained tepid during Asian trading hours. The leading American semiconductor company Nvidia experienced a decline for the third consecutive session, contributing to a 3.02 percent drop in the Philadelphia Semiconductor Index. As a result, shares of Disco fell by 5.5 percent, making it the largest percentage loser on the Nikkei, while Tokyo Electron shares declined by 1.7 percent.
Concurrently, the weaker yen continued to bolster export-related stocks, with automaker Toyota Motor notably benefiting from this trend. Toyota's stock ended the trading session up by 4.6 percent. This overall investor preference for value stocks over those of rapidly growing companies led to widespread gains in the financial sector, particularly among insurance companies, whose shares increased by 4.3 percent, leading the sector's gains. Automobile manufacturers and related suppliers also saw notable increases.
Additionally, Fast Retailing, the parent company of the Uniqlo clothing brand, rose by 1.1 percent, providing the Nikkei with its most substantial boost. The combination of a weaker yen and a strategic pivot towards value stocks resulted in a robust performance for the Nikkei, highlighting the evolving investor dynamics in the Japanese market.
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