Japan's Nikkei 225 Surpassed Record High After 34 Years, China Stocks Waver

Arjun Pandit
22 Feb, 2024
Mumbai

Markets in Asia generally traded higher, and investors reassessed the latest policy meeting minutes from the Federal Reserve. 

Benchmark indexes in Tokyo advanced, and tech stocks led the gainers following the strong quarterly results from Nvidia. 

The Nikkei 225 advanced 2.2% to 39,098.68 and closed above its record high 38,915.87, set on December 29, 1989.  

The price-driven index, which favors higher-priced stocks over market caps, has surged over 17% in the year so far, and the index has advanced the most among the largest 15 financial markets in the world. 

The benchmark index has been flirting around the record high level for weeks after strong interest from foreign investors supported the gain in the index for the second year in a row. 

The Nikkei index had fallen to as low as 8,200 in 2011 after a string of natural disasters following the tsunami and earthquake, leading to the meltdown of the Fukushima nuclear power plant. 

The broader Topix index, which is favored by financial professionals, is still trading 8.5% below its record high in 1989. 

Tech stocks were among the leading gainers after Nvidia reported a three-fold increase in its quarterly revenue on the back of solid demand for its AI chips. 

Disco Corp., Tokyo Electron, Advantest, SoftBank, and Screen Holdings increased between 4% and 10%. 

The Au Jibun Bank Japan Manufacturing PMI Index unexpectedly declined to 47.2 in February from 48.0 in January, according to the preliminary estimate released by the bank. 

The decline in the index was the deepest since August 2020, following the decline in new orders and export sales. 

The Au Jibun Bank Japan Services PMI Index decreased to 52.5 in February from a four-month high of 53.1 in January. 

The Japanese yen traded above 150 against the U.S. dollar after the release of the U.S. Federal Reserve's January policy meeting minutes. 

Policymakers noted that interest rates may be nearing their peak in the current tightening cycle, but it may be too soon to lower rates because that could prolong higher inflation for a longer period. 

 

China Indexes Rebound on Property Reform Hopes

Market indexes in Shanghai and Hong Kong continued to advance and extend weekly gains in the hopes that the Chinese government would follow through with meaningful and solid stimulus and policy measures. 

So far, the Chinese government and policymakers have treated the 3-year decline in stock market indexes as market volatility driven by speculators and not rooted in economic fundamentals. 

The CSI 300 index increased 0.5% to 3,474.63, and the Hang Seng index added 0.6% to 16,609.96. 

Property developers extended gains, and Henderson Land, China Resources Land, Sun Hung Kai Properties, China Vanke, and Longfor Group advanced between 1.5% and 4%. 

trip.com Group soared 7% to HK$355.0 after the online travel booking site reported better-than-expected fourth quarter financial results. 

Banks were under pressure for the second day in a row after HSBC Bank reported weaker-than-expected results in its fourth-quarter results. 

China Merchants Bank declined, but the Industrial and Commercial Bank of China and the Agriculture Bank of China advanced. 

 

India Stocks Extend Weekly Losses 

Stocks in Mumbai traded down and extended weekly losses as investors debated the future rate path, state of the economy, and stock valuation. 

The Nifty and Sensex indexes declined in Thursday's trading on the worry that global interest rates will stay higher for longer after the latest Federal Reserve's policy meeting minutes showed resistance to lower rates too soon. 

Stocks were also under pressure amid worries about stretched valuations, and banks, tech services exporters, and automotive vehicle makers were among the leading decliners. 

The Sensex index decreased 405.63 points to 72,201.35, and the Nifty index fell 133.50 points to 21,935.55. 

On the Mumbai stock exchange, 214 stocks traded at their 52-week highs and 11 stocks traded at their 52-week lows.

Mishra Dhatu Nigam rose 9.3% to ₹440.85 after the central government permitted 100% foreign direct investment in projects making satellite components.