Tokyo ends higher: Nikkei nears 51,000 points boosted by AI stocks and positive economic signals

Indices

The main Asian indices are currently reflecting a landscape of cautious optimism, flat short-term trends, and selective risk-taking. The Nikkei 225 50911.76 closed with a gain of 1.26379, climbing 635.39 and trading near recent record highs. This resilience suggests persistent investor confidence, likely driven by robust earnings and supportive policy expectations. The Hang Seng Index 26644.66 also posted a solid gain of 1.53503, rising 402.82, which signals a rebound but also highlights ongoing volatility and investor indecision. The SSE Composite Index 4018.5972 advanced 0.52625. Despite these upward moves, all three indices display flat micro-trend signals, indicating a widespread “wait-and-see” approach and a reluctance to commit to strong directional moves.

Stocks

Stock performance is marked by sharp sectoral rotation and heightened volatility. In Japan, technology and innovation-driven stocks such as Disco Corporation (TYO:6146) and Sumitomo Metal Mining (TYO:5713) have posted robust gains, signaling renewed interest in industrials and tech. Conversely, semiconductor heavyweights like Tokyo Electron (TYO:8035) and Advantest Corp. (TYO:6857) have experienced declines, reflecting profit-taking and sector-specific headwinds.

In China, mining (Zijin Mining Group, HK:2899) and technology (NetEase, HK:9999) continue to attract strong buying interest, rising 6.38 and 6.04 respectively. However, Chinese electric vehicle manufacturers—including NIO Inc. (NIO), Geely Automobile, Xpeng, and BYD—have slumped between -5 and -9, underscoring price wars and regulatory pressure. In Hong Kong, tech leaders like Tencent Holdings and Midea Group have seen moderate pullbacks, suggesting selective profit-taking in high-flying sectors.

Economic News

Recent macroeconomic data has been influential in shaping investor positioning. In Japan, the manufacturing PMI fell to 48.5, down from 49.7, indicating continued contraction in industrial activity despite the Tankan index for large manufacturers improving to 14. In China, Q2 GDP growth reached 5.2, robust by global standards, but recent trade data showed exports YoY for October at -1.1 and imports YoY at 1, pointing to external demand weakness and subdued domestic momentum. The World Bank’s upward revision of China’s 2025 GDP growth forecast to 4.8 supports a cautiously optimistic medium-term outlook.

Economic Events

Several high-impact economic events are setting the tone for the week. In China, the release of Services PMI (actual: 52.6, previous: 52.9) and the Balance of Trade (actual: 90.07) are closely watched for further signals of economic stabilization or headwinds. In Japan, investors are awaiting the Bank of Japan’s quarterly economic outlook and policy communications, which are likely to affect expectations around monetary accommodation and fiscal stimulus.

Market Sentiment

Market sentiment across Asia is characterized by cautious optimism and a high degree of indecision. The prevailing flat micro-trend signals across the Nikkei 225, Hang Seng Index, and SSE Composite Index indicate that traders are not committing strongly in either direction, preferring to remain nimble and responsive to upcoming macroeconomic and policy developments. Robust performance in select sectors, supportive policy signals, and upward GDP revisions provide a positive bias, but concerns over global demand, regulatory risks, and sector-specific challenges—especially in electric vehicles and semiconductors—continue to temper aggressive risk-taking. This environment favors selective positioning in technology, mining, and innovation-driven names while maintaining defensiveness in sectors exposed to policy and external risks.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.