Nikkei climbs to record high

Tokyo — Japan’s Nikkei share average topped its record peak on Thursday, after unexpectedly strong revenue forecasts from US chip designer Nvidia lifted Asian tech stocks.

However, the regional mood was tempered by the struggle in Chinese stock markets to extend multi-month highs reached amid Beijing’s stimulus efforts.

Long-term US bond yields hugged three-month highs while the dollar sagged after minutes from the last Federal open market committee [FOMC] meeting confirmed the view that interest rate cuts would be slow in coming, but were not markedly more hawkish than the Fed’s previously expressed views.

The Nikkei 225 share average surged as much as 2% to reach 39,029.00, topping the previous record high of 38,957.44, set on December 29 1989, at the peak of the so-called bubble economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.29%, helped by a 0.69% rise for Taiwan’s stock benchmark.

The Hang Seng was 0.17%, recovering from earlier losses, to put the Hong Kong benchmark on course to extend a seven-day winning run.

Mainland blue chips were last up 0.29%, after oscillating throughout the session between small gains and losses.

US stock index futures signalled solid gains, following a mixed session on Wednesday for the main benchmarks. S&P 500 futures rallied 0.7% and tech-focused Nasdaq futures jumped 1.4%.

Following the closing bell overnight, Nvidia forecast a roughly 233% surge in quarterly revenue, sending its shares up about 10% after-hours.

The Nikkei has jumped about 16.5% already in 2024, with the S&P 500 and Nasdaq rallying about 5% each, driven in large part by mammoth expectations for artificial intelligence (AI), with Nvidia’s chips at the centre of that boom.

“Nvidia’s earnings beat boosted sentiment and eased concerns over stretched valuations, providing room for the AI theme to continue to drive markets,” Saxo Markets analysts wrote in a research note.

The 10-year US treasury yield eased slightly in Asian time on Thursday to 4.3009%, but remained close to the 4.332% level marked a week ago, which had not been seen since the end of November.

The bulk of policymakers at the US Federal Reserve’s last meeting in January were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, minutes released on Wednesday showed.

That reinforced the view among traders that any rate cut is not imminent, with market pricing suggesting one-in-three odds for a first reduction in May, according to CME Group’s FedWatch Tool.

The dollar continued to retreat from a three-month high reached last week, when the US dollar index, which tracks the currency against six major peers, reached 104.97. It was down slightly at 103.96 in early trading on Thursday.

The euro ticked slightly higher to $1.0823, whereas the yen edged down to ¥150.41 to the dollar.

Elsewhere, oil prices rose slightly, adding to gains from the previous session that came amid signs of tighter supply.

US West Texas Intermediate crude futures (WTI) CLc1 rose 17c to $78.08 a barrel for the prompt month. The May contract gained 14c to $77.45 a barrel.

Brent crude for April delivery ticked up 14c to $83.17 a barrel, while the May contract added 13c to $82.24 a barrel.

Oil prices rose 1% on Wednesday, with refinery restarts in the US supporting demand after a series of outages earlier cut US refinery utilisation rates to the lowest level in two years.

Reuters