Japanese shares lifted by AI-related stocks, easing concern on oil supply

TOKYO: Japanese shares extended their rally for a second session on Wednesday, as investors bought beaten-down stocks, and worries eased about global oil supplies amid the Middle East conflict.

The Nikkei jumped 1.4% to close at 55,025.37, after earlier rising as much as 2.8%, while the broader Topix edged up 0.9% to 3,698.85.

“More investors are buying on dips, particularly in the most heavily sold-off areas where rebounds are emerging, and price action has been strong,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management.

Artificial intelligence-related shares, which took a particularly hard hit on Monday amid pessimism over the U.S.-Israeli war with Iran, were among the best performers on the Nikkei benchmark gauge.

Chemical and advanced-materials firm Resonac shares vaulted 10.4%, the index’s biggest percentage gainer.

SoftBank Group shares advanced 7.1% after surging nearly 10% earlier in the session, helped in part by strong earnings from Oracle, a partner in the Stargate AI infrastructure project. Cable and optical fibre maker

Fujikura also gained 6.6%.

There were 161 advancers on the Nikkei index against 63 decliners.

The oil market also remains in focus after sharp swings. The Wall Street Journal reported the International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices.

Brent crude futures LCOc1 swung between gains and losses in volatile trade, last rising 0.3% to $88.08 per barrel, while U.S. crude CLc1 was up 0.9% at $84.16 a barrel. Still, they were lower than the near $120 per barrel mark hit on Monday.

If crude continues to settle at around current levels, then equities are probably a buying opportunity, Fujiwara said.

“But if oil climbs back above $100, stocks will likely come under pressure again, and the (equities) market will have to go back to searching for a bottom,” he said.