[Today's Market] April 16 — Nikkei Stock Average hits all-time high, but the contents are skewed
Nikkei Heisei: record high
Tokyo market on the 16th continued to buy from the open.
The Nikkei stock average finished trading at 59,518 yen, up 1,384 yen from the previous day, updating the all-time high.
In the previous day’s U.S. market,
the Dow Jonesfell,the Nasdaq Compositereached a new high.
Technology-led developments continued.
Following that trend, Tokyo markets were led by semiconductors.
Advantest, Tokyo Electron, SoftBank Group.
Core stocks firmly pushed the index higher.
In the afternoon, a Taiwanese semiconductor company,TSMCreported earnings.
Results exceeded market expectations, providing buying reassurance.
Today, moves were seen beyond semiconductors as well.
Buyings also came into wire stock names like Furukawa Electric and Fujikura, which had lagged the prior day, contributing to the index rise.
Additionally, with earnings season underway,
・Sumishi Holdings(ordinary profit revised up by 72% from the previous period, dividend also raised)
・TechnoFlex(first-half ordinary profit revised to a 46% increase)
・Yashima Denki(announced share buyback)
Such favorable earnings and catalysts also rose in price ahead of others.
◆ Today’s Market Summary
・Nikkei 225 closed at 59,518 yen, up 1,384 yen, a new all-time high
・U.S. market rose led by Nasdaq
・Tokyo market also rose, led by semiconductors
・TSMC earnings provided reassurance
・Wire stock names and strong-earnings issues also attracted funds
・Despite index leadership, stock-specific breadth expanded
◆ Investor Notes
Today’s rally is very strong.
But one thing to keep in mind.
Just because the Nikkei is strong does not mean the entire market is strong.
As semiconductors’ leading stocks contribute heavily, if those are bought, the index will rise.
In other words,
“The index is rising, but my holdings aren’t necessarily doing so.”
This kind of misalignment tends to occur in such periods.
On the other hand, funds did flow into wire stocks and strong-earnings names today,
and there was somewhat broader breadth than before.
Whether this breadth will continue or return to a concentration in the big players remains an important point for future markets.
This is a moment to look beyond the index’s strength and carefully examine the contents.
Focus on the underlying fundamentals rather than being swept up by the index’s strength.