Tech and Chip Companies Help Nikkei Recover After Wave of Sales

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The Tokyo stock exchange showed recovery on Tuesday after recent price pressure that followed interest rate hikes worldwide by central banks to fight inflation. The other markets in the Asian region also rebounded.

 

Investors brushed aside fears that higher interest rates might lead to an economic recession and started looking for heavily penalized stocks, especially in the tech and chip sectors.

Investors continued to take it easy ahead of the reopening on Wall Street, where markets are reopening after a long weekend. Based on the opening indicators, the American stock markets also seem to be recovering somewhat after the worst week on the stock market since the start of the corona crisis.

The Nikkei in Tokyo eventually finished 1.8 percent in the plus at 26,246.31 points. Tech investor SoftBank was among the strongest risers with a gain of 3 percent. The chip companies Advantest and Tokyo Electron also rebounded with pluses of around 3 percent. Major Japanese exporters benefited from the decline in the Japanese yen, which is making their products cheaper abroad. Partly because of this, car manufacturer Toyota and technology group Sony increased by more than 2 percent and almost 4 percent.

The Hang Seng index in Hong Kong was 1.4 percent higher in the meantime. The Chinese internet and game company Tencent, in which the Amsterdam-listed investor Prosus has a large stake, climbed more than 2 percent. The main indicator in Shanghai lagged with a minus of 0.4 percent due to concerns about the increasing number of corona infections in the important Chinese tech centre Shenzhen and gambling paradise Macau. The Kospi in Seoul gained 0.8 percent.

In Sydney, the All Ordinaries rose more than 1 percent. Bank of Australia Governor Philip Lowe said in a speech that inflation is expected to peak at around 7 percent by the end of the year. He warned that interest rates will be raised further to bring inflation back to a level of 2 to 3 percent.

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