Nikkei hits another 21-year high on record win streak

October 24, 2017

TOKYO- The benchmark Nikkei average rose for a record 16th straight session and marked the highest closing level in 21 years and three months on the Tokyo Stock Exchange Tuesday, reflecting brisk corporate earnings.

The 225-issue Nikkei average gained 108.52 points, or 0.50 percent, to end at 21,805.17, the best finish since July 11, 1996, after surging 239.01 points on Monday.

The TOPIX index of all first-section issues extended its winning streak to a 12th session, closing up 11.67 points, or 0.67 percent, at 1,756.92, the highest closing since July 23, 2007. On Monday, the index gained 14.61 points.

Stocks got off to a sluggish start, weighed down by selling to lock in profits from the recent advance.

Later in the morning session, stocks fluctuated between positive and negative territory, caught in a tug of war between profit-taking and buying on dips, brokers said.

Stocks headed higher in the afternoon, buoyed by a spate of robust earnings reports from major companies, market sources said.

The landslide victory of Japan's ruling coalition in the general election on Sunday "seems to have been positively received by foreign investors" and prompted buying, said Hiroaki Hiwada, strategist at Toyo Securities Co.

In the closely watched poll for the House of Representatives, Prime Minister Shinzo Abe's Liberal Democratic Party and its coalition partner, Komeito, secured a combined two-thirds majority in the all-important lower chamber of parliament.

Foreign investors' hope for stability of the Abe administration was also shown in their dull market activities earlier this year when public approval ratings for the Abe cabinet were sluggish, Hiwada said, explaining their appetite on Tuesday.

Foreign investors have been motivated to correct their underweight positions on Tokyo stocks amid the recent rise of the market and bought a wide range of stocks, said Chihiro Ota, general manager for investment research and investor services at SMBC Nikko Securities Inc.

"Individual investors are also becoming active about buying," although reluctantly due to fears that the winning streak may stop at any time, Ota added.

The uptrend of Tokyo stock prices is likely to continue for the time being, Hiwada predicted.

Rising issues far outnumbered falling ones 1,510 to 440 in the TSE's first section, while 82 issues were unchanged. Jiji Press