In a powerful rebound, Japan's premier stock index, the Nikkei 225, catapulted itself back above the psychologically significant 50,000 mark on Thursday. This impressive surge was primarily fueled by a rally in technology stocks, ignited by blockbuster financial results from the global artificial intelligence (AI) leader, Nvidia.
Market Momentum and Key Drivers
The Nikkei 225 Index experienced a substantial jump of 3.5% to close at 50,254.38. This robust performance is set to end a four-session losing streak, provided the current momentum holds. The broader Topix index also registered strong gains, rising by 2.3%.
The catalyst for this global market movement was Nvidia's stunning performance. After the closing bell in New York, the chip designer, often seen as the bellwether for the AI sector, forecast quarterly revenue that significantly surpassed analysts' estimates. This report served as a major reassurance for investors who had been concerned that massive investments in AI infrastructure might have created a market bubble.
AI Sector Leads the Charge
The optimism stemming from Nvidia's results had an immediate and profound impact on Japanese companies linked to the AI industry. Maki Sawada, a strategist at Nomura Securities, highlighted the sentiment, stating, "Ahead of Nvidia's results, there was heightened focus on whether AI-related profitability would justify massive infrastructure investments. Companies that had seen selling on profit-taking are now being bought back, leading to a sharp rebound in the Nikkei."
The market's breadth was overwhelmingly positive, with 208 stocks advancing against only 17 decliners within the Nikkei index. The heaviest contributors to the index's advance were AI-industry giants, including:
- Advantest
- SoftBank Group
- Tokyo Electron
Further highlighting the sector-wide rally, Fujikura, a major supplier of wires and cables to data centres, saw its shares surge by an impressive 9.4%.
Broader Market Impact and Corporate Actions
The positive sentiment extended beyond the pure-play tech sector. Shares of Sompo Holdings skyrocketed 8.9% after the insurance company announced a substantial share buyback program worth 77 billion yen ($490 million).
This powerful rally underscores the critical role that Japanese suppliers and investors in the AI sector play in driving the country's stock market to record highs, marking a strong recovery after a recent pause.
