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Nikkei Surges Past 50,000 on AI Enthusiasm
21 Nov
Summary
- Nikkei 225 index briefly surpassed 50,000, closing up 2.7%.
- Nvidia's strong revenue forecast eased AI sector valuation concerns.
- Advantest and Tokyo Electron led the index's advance.
- Fujikura, a data center supplier, surged 5.9% on the news.
Japan's Nikkei 225 index experienced a significant rebound on Thursday, briefly crossing the 50,000 threshold. The benchmark closed with a 2.7% gain at 49,823.94, while the broader Topix index rose 1.7%. This upward momentum was largely fueled by a robust quarterly revenue forecast from AI darling Nvidia, which allayed market fears of an emerging AI bubble.
Investor sentiment was bolstered as Nvidia's strong performance provided reassurance that substantial investments in AI infrastructure expansion are translating into profitability. Japanese companies supplying and investing in the AI sector, which had previously powered the Nikkei to record highs before a mid-month pause, saw renewed buying interest. Strategists noted that companies previously subject to profit-taking were now experiencing buybacks, contributing to the sharp market rebound.
Leading the charge were AI industry stalwarts Advantest and Tokyo Electron, significantly boosting the index. Fujikura, a crucial supplier of wire and cables to data centers, also saw its shares climb 5.9%. In a separate development, insurer Sompo Holdings announced a substantial share buyback of 77 billion yen, leading to a 10.5% increase in its stock price. Conversely, Tokyo Electric Power declined nearly 4% amid reports of mishandled documents.
