Financial markets/economy

Stock markets: Japan's Nikkei breaks all-time record and Nvidia returns to growth in the US

Posted by MoneyController on 22.02.2024

The Nikkei broke its all-time record, while Nvidia surprised analysts in the US with its revenues. And these two facts are somewhat related.

The Nikkei breaks all records

For thirty-four years, the Nikkei 225's price record remained unbeaten: in fact, the best session ever was on 29 December 1989, when the index reached 38,957.44 points. Then came a difficult period for the economy and, in particular, for the Japanese stock market. In today's session, Thursday 22 February, the Nikkei surpassed this record by crossing the 39,000 mark.

Diversification and a weak yen keep the Japanese stock market running

The Japanese stock market is running while the economy is in recession: how is this possible? The Italian newspaper 'Il Post' explains that there are two reasons for the market's performance. The first, in the medium and long term, is that investors are watching Japan with interest, both to diversify their investments in Asia (also in view of China's recent difficulties) and because of its expansive economic policy, which has weakened the yen and made prices more favourable for foreign investors with strong currencies (such as the euro or the dollar).

US technology sector also driving Japan

The other reason is the excellent performance of Nvidia and Arma, two companies involved in semiconductors (or chips) related to artificial intelligence. Both companies are listed on the stock exchange and are helping to boost investor confidence in the innovation and technology sector, a very important sector not only for the US economy but also for the Japanese economy.

Nvidia: Revenue beats expectations and share price rallies

Nvidia, in particular, managed to beat investors' expectations, with revenues of more than $22 billion in the fourth quarter of 2023, against expectations of just $20 billion. This led to a 9 per cent rise in the share price in after-hours trading (one share of the company is currently worth just under $736). The company also predicted that revenues would reach as high as $24 billion in the first quarter of 2024.

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