Japan’s Nikkei rallies after steep decline as focus turns to tech results

TOKYO, July 21 : Japan’s Nikkei share average rose on Tuesday as markets reopened after a holiday and investors seized on bargains following the gauge’s steepest weekly selloff in more than a year.

The benchmark Nikkei 225 advanced 1.25 per cent to 64,945.96 in early trading, recovering part of its 6.4 per cent plunge last week. The broader Topix climbed 1.33 per cent to 3,971.20.

While Japanese markets were closed on Monday, Wall Street indexes edged lower as an escalation in the U.S.-Iran conflict put upward pressure on oil prices.

Investor attention is now turning to second-quarter results due later this week from AI bellwethers including Alphabet, Tesla and Intel.

“Compared to the sharp fall we saw in the latter half of last week, this technical rebound does not yet appear to have very strong momentum,” said Wataru Akiyama, an equities strategist at Nomura Securities. 

“Upcoming earnings announcements in Japan and the U.S., particularly those from major names, are likely to resolve some of this weakness in AI-related shares.”

Breadth on the Nikkei was overwhelmingly positive, with 196 of the 225 names trading higher and 28 lower.

The largest percentage gainers in the index were chipmaker Kioxia Holdings, up 5.89 per cent, followed by cosmetics giant Shiseido, 5.78 per cent higher, and heavy machinery maker IHI, which gained 4.14 per cent.

The largest losers were video game maker Nintendo, down 3.91 per cent, followed by tech-industry supplier Sumco, 3.45 per cent lower, and Nikon, which lost 2.18 per cent.