[Today's Market] April 28 — Signs of a change in an unusual pattern as Nikkei declines and TOPIX rises

When the Nikkei falls, the stocks you hold rise.

This is quite difficult to deal with, isn’t it?

On the 28th, Tokyo markets saw the index retreat from the opening, while the price movement of individual stocks varied.
The Nikkei Stock Average closed at 59,917 yen, down 619 yen from the previous day.

In the previous day’s U.S. markets,the SOX indexextended its gains for 18 sessions but then stalled,
NVIDIAreaching a six-month high.

Nevertheless,the Dow Jones Industrial Averagefell,the Nasdaq Compositerose, showing mixed moves.

Following this trend, the Tokyo market saw selling dominated by the earnings report from Advanced Micro Devices after the previous session’s close.

Additionally, SoftBank Group faced a sharp drop after ARM’s stock plunge, pushing down broadly in semiconductor-related stocks and weighing on the Nikkei average.

On the other hand, the TOPIX remained solid.

As funds flowed out of semiconductors and into a broad range of stocks,

the overall market felt almost broad-basedly higher in perception.

◆Today’s Market Summary

・Nikkei Average fell 619 points to 59,917 yen
・U.S. markets showed a mixed complexion in semiconductors
・Declines in semiconductor stocks dragged the index down
・TOPIX rose, with broad stock buying
・Disparity between index and its constituents widened

Moreover, the earnings season is starting to show effects.

After the close,Shin-Etsu Chemicalannounced a lower profit and an undecided dividend.
In after-hours trading, the stock is being heavily sold.

This could dampen sentiment around semiconductor-related stocks.

During trading,Bank of Japanannounced a hold on the policy rate at the monetary policy meeting.

However, market participants should note that expectations for further rate hikes are beginning to be priced in.

◆Investor Notes

The current market is quite distinctive.

When the Nikkei falls, the TOPIX rises.

This distorted dynamic has persisted.

Underlying this is a shift of funds from semiconductor-led moves to a broader range of stocks.

Moreover, market attention is turning toward the situation in Iran and what comes after.

What comes after the war?
This speculation is becoming a guiding axis for the market.

What’s crucial now is whether this distorted dynamic will continue or move toward normalization.

Although it’s a holiday-shortened market,

changes in capital flow tend to presage the next trend.

It’s an appropriate moment to watch not only index movements but also changes in the contents of what’s being traded.