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Nikkei touches 8-mth high on earnings, chip investment; steel makers tumble

The Nikkei added 0.09% to close at 28,620.07. (AFP)
The Nikkei added 0.09% to close at 28,620.07. (AFP)
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25 Apr 2023 04:04:28 GMT9
25 Apr 2023 04:04:28 GMT9

Japanese shares inched higher, with the Nikkei index touching the highest level in eight months, led by electronics makers on earnings optimism and expanded government subsidies for chip production.

Shares lost momentum in the afternoon session, weighed down by steel producers amid signs of weakening Chinese demand.

The Nikkei added 0.09% to close at 28,620.07, advancing for a second straight session. In early trading, the gauge jumped as much as 0.75% to 28,806.69, the highest since Aug. 19, 2022. The broader Topix rose 0.24% to 2,042.15.

Mitsubishi Electric Corp rose 3.28%, leading Nikkei gainers, after the company said it would spin-off its automotive audio business. Shares of motor maker Nidec Corp climbed 0.92% as a rosy full-year profit estimate overshadowed a quarterly loss reported on Monday.

“The company (Nidec) has announced a V-shaped recovery in its operating income forecast,” Nomura Securities strategist Kazuo Kamitani said. “It appears that the market today is taking guidance from those results.”

Tech shares are in focus amid a slate of major U.S. companies due to report earnings this week, including Inc and Google operator Alphabet Inc.

Chip stocks were buoyed after Industry Minister Yasutoshi Nishimura said Japan plans to give additional subsidies to chipmaker Rapidus, which plans to build a cutting-edge factory on the northern island of Hokkaido.

Chip equipment giant Tokyo Electron Ltd added 0.20%, while testing equipment manufacturer Advantest Corp climbed 1.02%.

Daiwa House Industry Co jumped 2.68% after the homebuilder raised its profit forecast for the just-ended fiscal year.

There were 107 gainers in the Nikkei against the 111 that lost ground. Securities companies were the top performers among the Tokyo Stock Exchange’s 33 industry sectors, rising 1.57%. Iron and steel makers were the biggest decliners.

Nippon Steel Corp slid 3.8% while Kobe Steel Ltd dropped 3%, leading losses on the Nikkei. Benchmark prices for iron ore and steel sank to the lowest levels since November on Monday.


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