Japan’s Nikkei reclaims key 50,000 mark as tech stocks rally on Nvidia results

TOKYO: Japan’s Nikkei share average jumped back above the key 50,000 mark on Thursday, led higher by technology stocks after strong results from Nvidia eased valuation concerns over the artificial-intelligence sector.

The Nikkei 225 Index jumped 3.5% to 50,254.38, set to snap a four-session loss, if the current momentum persists. The broader Topix was up 2.3%.

After the bell in New York, AI darling Nvidia forecast quarterly revenue well above analysts’ estimates.

Global markets have looked to the chip designer to determine whether investing billions of dollars in AI infrastructure expansion has resulted in an AI bubble.

Japanese suppliers and investors in the AI sector have been major drivers in powering the Nikkei gauge to all-time highs before a pause set earlier this month.

“Ahead of Nvidia’s results, there was heightened focus on whether AI-related profitability would justify massive infrastructure investments,” said Maki Sawada, a strategist at Nomura Securities.

“Companies that had seen selling on profit-taking are now being bought back, leading to a sharp rebound in the Nikkei.”

There were 208 advancers in the Nikkei index against 17 decliners. AI-industry heavyweights Advantest, SoftBank Group, and Tokyo Electron were the biggest contributors to the index’s advance.

Fujikura, a major supplier of wire and cables to data centres, surged 9.4%.

Shares of Sompo Holdings surged 8.9% after the insurer announced a buyback of 77 billion yen ($490 million) of its own shares.