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Tech shares lead Japan's Nikkei higher in choppy session
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Tech shares lead Japan's Nikkei higher in choppy session
Oct 20, 2024 9:09 PM

TOKYO, Oct 21 (Reuters) - Japan's Nikkei share average

rose in a choppy session on Monday, as gains in technology

stocks lifted the benchmark index, while caution ahead of a

domestic election and corporate earnings weighed on sentiment.

The Nikkei managed to turn around after starting in

the red, rising 0.3% to 39,110.95 by the midday break, while the

broader Topix was up 0.04% at 2,689.99.

Domestic tech shares followed their U.S. peers higher after

an earnings-driven jump in Netflix shares and broader gains

across tech stocks on Friday.

The Dow Jones Industrial Average and S&P 500 chalked up

record closing highs on Friday, with the Nasdaq also in positive

territory, thanks to the tech bump.

Nikkei heavyweight chip-testing equipment maker Advantest ( ADTTF )

was up 2.2% to offer the biggest lift, followed by

chip-making equipment giant Tokyo Electron ( TOELF ), adding

1.1%.

But the index struggled for momentum outside of tech shares,

which analysts attributed to caution before more company

earnings announcements later this week.

A general election will also be held in Japan on Oct. 27,

where it remains to be seen whether the nation's ruling party,

the Liberal Democratic Party (LDP), will succeed in winning the

233 seats needed to keep a lower-house majority by itself.

"It seems like investors are refraining from active trading

in anticipation of these events", creating a heavy upward

resistance, said Masahiro Ichikawa, chief market strategist at

Sumitomo Mitsui DS Asset Management.

If the LDP fails to retain a majority in the upcoming

election, that could "heighten uncertainty and potentially lead

to increased volatility in the market", he added.

Among other major decliners, Uniqlo parent firm Fast

Retailing ( FRCOF ) edged down 0.2%, along with telecoms company

KDDI ( KDDIF ) slipping 0.8%, and pharmaceutical firm Daiichi

Sankyo ( DSKYF ) losing 1.3%.

Of the Nikkei's 225 constituents, 104 advanced while 118

declined.

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