Nikkei 225 Surges to Record High, Boosting Asia-Pacific Markets: Will Tech Stocks Keep Rising?

Seoul, South Korea – The South Korean government has recently announced a significant financial support program to aid companies looking to increase investment in key sectors and assist struggling small businesses impacted by high interest rates. With a total allocation of 75.9 trillion won, equivalent to $56.97 billion, this initiative aims to bolster economic growth and foster resilience in the business community.

In Japan, the Nikkei 225 index reached a historic high, surpassing the 42,000 mark for the first time. This surge was mirrored in other Asia-Pacific markets, driven by a rally in U.S. Big Tech stocks and growing optimism around potential Federal Reserve rate cuts. The Nikkei experienced a 1.37% increase at the opening, with the broader Topix index also hitting new highs, up by 1.17%.

Chip stocks emerged as notable winners in the U.S. trading session, with Taiwan Semiconductor Manufacturing Company’s U.S.-listed shares rising by 3.5% after exceeding Wall Street revenue estimates for April to June. Other chip firms like Qualcomm, Broadcom, and Nvidia also saw positive upticks in their stock prices, reflecting a favorable outlook for the technology sector in Asia.

Investors in the region are keenly observing developments in Japan’s tech industry, particularly noting how chip-related companies are driving the Nikkei 225 index to record levels. In the coming days, economic releases from Japan, such as May machinery orders, and the Bank of Korea’s rate decision will provide further insights into the region’s economic landscape.

South Korea’s Kospi index demonstrated a strong performance ahead of the Bank of Korea’s decision, while Australia’s S&P/ASX 200 also saw gains. Hong Kong’s Hang Seng index futures pointed to a positive opening, reflecting optimism in the market following the previous close.

In the U.S., all three major indexes experienced growth, with the S&P 500 and Nasdaq Composite both gaining over 1%. This upward trajectory led the S&P to break the 5,600 mark for the first time, achieving its 37th record close in 2024. The Nasdaq also celebrated its 27th record close of the year, while the Dow Jones Industrial Average saw a 1.09% increase.

Market sentiment was lifted by expectations of potential rate cuts, with projections indicating a lower June inflation rate compared to the previous month. As investors navigate evolving economic conditions and market dynamics, heightened attention is being placed on key indicators and central bank decisions impacting global financial markets.