Following a sharp dip the previous day, Japan‘s Nikkei stock average made a strong recovery on Tuesday, aligning with Wall Street’s positive sentiment as investors turned their focus towards optimistic earnings projections, overshadowing worries about the situation in Gaza.
The Nikkei saw a 0.9% uptick, closing at 31,944.31, reclaiming over half of Monday’s 2% decline.
Out of the 225 components in the benchmark, 172 saw gains, 49 experienced declines and two remained unchanged.
The broader Topix index also saw an increase of 0.8%.
Kenji Abe, an analyst at Daiwa Securities, expressed confidence in robust earnings reports expected from both Japan and the U.S. this quarter, which he believes will provide a solid foundation for equity prices.
“While I believe that the risks are appropriately assessed and that stocks are not overvalued, I anticipate these risks will diminish over the next six months, potentially leading to substantial gains for the Nikkei,” Abe stated, forecasting a rise to 35,000 for the index by the end of March.
The unofficial commencement of Japan’s earnings season began with the influential motor manufacturer, Yaskawa Electric, on October 6, with the pace of reports set to accelerate towards the end of the month.
Tech stocks in Japan, which initially experienced significant sell-offs at the beginning of the week, rebounded vigorously.
The industry giant, Tokyo Electron, specializing in chip manufacturing, notably surged by 2.4%. Additionally, Advantest gained 1.2%, and Lasertec saw a 1.5% increase.
SoftBank Group, a prominent startup investor, also saw a notable rise of 2.7%.
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