Global Markets | Japan’s Nikkei closes above 60,000 for first time on earnings optimism

Japan’s Nikkei closed above the key 60,000 mark for the first time on Monday as optimism over corporate earnings overshadowed concerns about theMiddle East conflict.

The benchmark Nikkei 225 Index rose 1.38% to finish the session at an unprecedented 60,537.36. The broader Topix climbed 0.5% to 3,735.28. ‌The Nikkei ⁠has gained ⁠18.6% so far this year.

Major indexes on Wall Street closed at record highs on Friday after Intel beat its earnings estimate, helped by surging demand in theartificial intelligence sector. The Philadelphia SE Semiconductor Index extended its record run of gains to 18 consecutive sessions.

Shares of factory automation provider Keyence and industrial robot maker Fanuc surged by their daily trading limit, nearly 16%, to ⁠lead gains ‌in the Nikkei after both firms reported better-than-expected profit after the bell on Friday.

“Stocks related to earnings announcements, as well as ⁠AI and semiconductor-related shares, led the market higher at the open,” said Maki Sawada, an equities strategist at Nomura Securities. “This week will see a steady stream of earnings reports from major companies in both Japan and the U.S., so market attention will naturally gravitate toward those results.”

“Since 60,000 is a psychological milestone, many investors are likely keeping an eye on that level, so profit-taking could manifest around that range,” ‌she added.

The Nikkei fell into negative territory shortly after the open, but then rallied sharply following an Axios report that Iran has given the United States ⁠a new proposal to end their war. Discussions to settle the two-month-long conflict were stalled over the weekend.

There were 94 advancers in the Nikkei index against 130 decliners. SMC was among the top gainers, rising 7.1%, after Reuters reported that activist fund Palliser Capital had made a “significant” investment in the factory automation company.

Rohm was among the steepest decliners, down 9.19%, after auto parts maker Denso Corp said it was considering withdrawing its takeover offer for the firm.