Japan’s Nikkei share average achieves an unprecedented milestone, closing 2.19% higher and reaching a historic peak, driven by the remarkable revenue forecasts from U.S. chip designer Nvidia. Asian tech stocks experience a surge as Nvidia anticipates an impressive 233% rise in quarterly revenue, boosting market sentiment.
Japan’s Market Resilience
Closing at 39,098.68, the Nikkei 225 outperforms expectations, marking a new all-time high and surpassing its previous records set in 1989. Analysts attribute this resilience to robust corporate earnings, a favorable yen backdrop, and positive responses to the government’s emphasis on greater corporate governance.
Asian Equities Rally
The broader Asia-Pacific market reflects the Nikkei’s optimism, with MSCI’s index rising 0.56%. Taiwan’s stock benchmark and Hong Kong’s Hang Seng contribute to gains, rebounding sharply after initial losses. Mainland Chinese blue chips exhibit strength, maintaining an upward trajectory amid optimism surrounding Beijing’s stimulus initiatives.
Nvidia’s Influence on Global Markets
Following Nvidia’s after-hours surge, U.S. stock index futures signal solid gains, showcasing the influential impact of the chip designer’s robust performance. The S&P 500 and Nasdaq futures exhibit strength, indicating a positive trend in the broader equities market.
Market Drivers: AI Theme and Federal Reserve Insights
The Nikkei’s remarkable 17% surge in 2024 aligns with global expectations for artificial intelligence (AI), with Nvidia’s chips at the forefront. Insights from the Federal Reserve’s January meeting, emphasizing a cautious approach to interest rate cuts, further shape market sentiment. Traders anticipate a potential rate reduction in May, according to CME Group’s FedWatch Tool.
Currency and Oil Market Movements
While the dollar retreats from its recent high, the 10-year U.S. Treasury yield hovers around three-month highs. The euro and sterling see modest gains against the dollar. In the oil market, prices rise as signs of tighter supply emerge, with U.S. West Texas Intermediate crude and Brent adding to the momentum.
