Nikkei 225 Surges to Record Highs, Asian Markets Rally on U.S. Tech Momentum

Seoul, South Korea – The South Korean government has announced a significant financial support program amounting to 75.9 trillion won ($56.97 billion) aimed at assisting companies looking to increase investments in strategic sectors. This initiative also targets small businesses grappling with the challenges brought on by high-interest rates. The program is designed to provide much-needed assistance to boost economic growth and support struggling businesses in the current financial climate.

One of the key outcomes of this financial support program is the rise in Japan’s Nikkei 225 index, which has surged to a new high, surpassing the 42,000 mark for the first time. This positive momentum in the Asian markets is attributed to a rally in U.S. Big Tech stocks and growing optimism regarding potential Federal Reserve rate cuts. The Nikkei index saw a 1.37% increase at the beginning of trading, with the broader-based Topix index also reaching new highs with a 1.17% rise.

Chip stocks were among the top beneficiaries in the U.S. trading session, with companies like Taiwan Semiconductor Manufacturing Company posting a 3.5% increase in shares after beating Wall Street revenue estimates. Other industry players such as Qualcomm, Broadcom, and Nvidia also experienced positive gains, further boosting investor confidence in the tech sector across Asia.

Investors in Asia are closely monitoring the performance of tech stocks in the region, particularly in Japan, where companies in the chip-related sector have played a significant role in driving the Nikkei 225 index to unprecedented heights. Additionally, economic announcements from various countries in the region, such as Japan’s May machinery orders and the Bank of Korea’s rate decision, are expected to provide further insights into the overall economic landscape.

In South Korea, the Kospi index showed a 0.96% increase ahead of the Bank of Korea’s decision, while the Kosdaq index also saw a 0.22% rise. Australia’s S&P/ASX 200 index recorded a similar increase of 0.85%, reflecting positive investor sentiment in the region. Futures for Hong Kong’s Hang Seng index were trading higher compared to the previous close, indicating a potential continuation of the positive trend in the market.

The recent uptrend in the U.S. market has seen all major indexes posting gains, with both the S&P 500 and Nasdaq Composite registering a 1.02% and 1.18% increase, respectively. This upward movement has propelled the S&P 500 index above the 5,600 mark for the first time, marking its 37th record close in 2024. Similarly, the Nasdaq Composite achieved its 27th record close this year, showcasing the overall strength of the U.S. market.

The positive market performances in various regions can be attributed to hopes of potential rate cuts, with expectations of a lower inflation rate in June compared to the previous month. These projections have fueled investor optimism and contributed to the overall positive momentum in global markets.