Japan's Nikkei hits record high, led by tech, insurance sectors

Nikkei hits record high: Japan's Nikkei share average on Friday hit record high as tech-related stocks mirrored the record-high performance of their US counterparts, while insurance companies saw gains following announcements of cross-shareholding sales by several firms.

The Nikkei reached 39,883.86, marking a 1.83 per cent increase by the midday break and surpassing the previous intraday high of 39,426.29 earlier in the week. 

With this momentum, the index is on the verge of breaching the 40,000-point threshold, continuing its ascent since surpassing the lifetime high set during the December 1989 asset bubble.

The broader Topix also saw gains, rising by 1.14 per cent to 2706.18.

Investor sentiment remained positive after the S&P 500 and Nasdaq closed at record levels, driven by technology stocks associated with artificial intelligence (AI). 

Moreover, US inflation data and remarks from Federal Reserve officials fueled speculation of a potential interest rate cut in June.

In the morning session, tech-related shares contributed majorly to the Nikkei's 17 per cent surge this year. 

Tokyo Electron Ltd gained 4.64 per cent, while chip-testing equipment maker Advantest, with Nvidia among its clients, rose by 2.63 per cent. SoftBank Group, an investor in AI-focused startups, also climbed by 2.05 per cent.

The insurance sector saw gains following announcements from non-life insurance companies regarding plans to sell cross-shareholdings in the coming years. 

Analysts view this move positively as it allows companies to enhance shareholder returns.

Expectations are high for companies to continue boosting returns through similar measures, spurred by reform requests from the Tokyo Stock Exchange, which has been a key driver of the Nikkei's recent surge.

Among the Tokyo Stock Exchange's sectors, insurance led the gainers, rising by 2.51 per cent, followed by miners, which saw a 2.27 per cent increase.

(With Reuters Inputs)