Historic Record for the Japanese Nikkei Index

The Japanese Nikkei reached a historic record on Thursday, following unexpectedly strong business results from the American chipmaker Nvidia, which spurred a surge in Asian technology stocks, and as a result, Chinese markets also strengthened.

The Japanese Nikkei index rose by 2 percent to 39,028 points, surpassing the previous peak of 38,957 points from 1989, after a year-long rise in stock prices driven by low stock valuations, corporate reforms, and capital inflows from the struggling Chinese stock market. The Nikkei is now approximately 16.5 percent up since the beginning of the year, while the American S&P and Nasdaq are up about five percent.

– For us traders, this marks a new era. It seems that the stock market is telling us that we have finally escaped deflation and that a new world is opening up for us – said Tsutomu Yamada, an analyst at Tokyo-based AU Kabucom Securities.

Chinese markets also rose this morning, led by stocks of companies utilizing artificial intelligence, following Nvidia’s better-than-expected business results. The Shanghai index is up 0.9 percent, and the Hong Kong HSI is up 0.84 percent.

However, despite the improved performance of Chinese stock markets due to a series of monetary policy measures, investor sentiment remains fragile and will likely remain so until a recovery in the world’s second-largest economy becomes visible.

– Foreign investors are generally still cautious. They believe that the recent recovery is mainly a result of poor performance ahead of the Lunar New Year – UBS analysts noted, adding that Chinese deflation and issues in the real estate sector remain causes for concern.

The MSCI index of Asian markets was up 0.29 percent around 6:30 AM, supported by rising technology stock prices.

In the foreign exchange markets, the dollar continued to retreat from its highest levels in the last three months, which it reached last week. The dollar index, which measures the performance of the US dollar against six major world currencies, stood at 103.84 points this morning, down 0.92 percent from the previous day.

At the same time, the euro strengthened slightly by 0.18 percent to 1.0833 dollars, while the yen weakened by 0.13 percent to 150.26 yen per dollar.

In Cautious Trading, Wall Street Rose Slightly

On Wall Street, trading was cautious on Wednesday as investors were reluctant to take risks following the release of the minutes from the recent Fed meeting, and ahead of the quarterly business results announcement from tech giant Nvidia.

The Dow Jones rose by 0.13 percent to 38,612 points, and the S&P 500 also increased by the same percentage to reach 4,981 points. The Nasdaq index, however, fell by 0.32 percent to 15,580 points.

Caution prevailed on the world’s largest stock exchange as the minutes from the US central bank meeting showed that its leaders are concerned about the risks that could arise if interest rates are lowered too early and that they are uncertain about how long rates should remain elevated.

Recently, stock prices on Wall Street have risen sharply as investors hoped that the Fed would aggressively cut rates this year, starting from the March meeting. However, March is no longer mentioned, and after yesterday’s release of the minutes, the prevailing market opinion is that rate cuts are unlikely to occur before June.

Investors were also cautious yesterday as they awaited Nvidia’s business results.

After the market closed, the chipmaker reported higher-than-expected revenues and earnings in the last quarter of last year, causing Nvidia’s stock price to jump more than 6 percent in after-hours trading, recovering all losses from previous days.

As stock prices of several other chip manufacturers also rose, the S&P 500 and Nasdaq futures this morning were up between 0.7 and 1 percent, indicating that these indices could rise at the start of trading on Wall Street on Thursday.

Most European stock exchanges also saw stock prices rise yesterday. However, the London FTSE index fell by 0.73 percent to 7,662 points, while the Frankfurt DAX rose by 0.29 percent to 17,118 points, and the Paris CAC increased by 0.22 percent to 7,812 points.