Japan’s Nikkei Pulls Back from Record High Amid Profit-Taking and Rising Oil Prices.

Japan’s Nikkei share average experienced a slight decline on Tuesday, retreating from a prior record high, as profit-taking by investors and rising oil prices negatively impacted market sentiment. The index closed 0.25% lower at 64,996.09, after surging 2.87% to reach 65,158.19 on Monday, which marked its steepest three-day gain in over six years at an impressive 8.95%. The broader Topix also saw a marginal decline, finishing 0.1% lower at 3,938.46, indicating a cautious tone among market participants.

According to Daisuke Hashizume, a senior strategist at Daiwa Securities, the market had shifted to a risk-on mode, but recent rallies prompted investors to realize gains through profit-taking. The optimism surrounding a possible U.S.-Iran peace deal has been largely factored into the market, while increases in oil prices have further dampened sentiments. This comes on the backdrop of ongoing negotiations in Doha between Iran’s top negotiator and its foreign minister, and Qatar’s prime minister, amid rising tensions following U.S. military strikes in Iran.

The impact on specific sectors was notable, with chip-related heavyweights such as Advantest and Tokyo Electron declining by 6% and 1.46%, respectively. Other notable losers included memory maker Kioxia and fiber optic cable maker Fujikura, down 4.57% and 3.98%. In contrast, SoftBank Group emerged as a bright spot, soaring 10.91% and providing substantial support for the Nikkei. Overall, trading activity on the Tokyo Stock Exchange’s prime market reflected the mixed sentiment, with 44% of shares rising and 52% falling, alongside 3% remaining flat.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)