Japan’s Nikkei share average closed at a 29-year high on Tuesday as investors cheered news of another potential coronavirus vaccine that re-ignited hopes of a swift global recovery.
The Nikkei share average rose 0.42% to 26,014.62, its highest close since May 1991. The broader Topix added 0.15% to 1,734.39, after having slipped into negative territory in morning trade.
Investor sentiment was given a boost when Moderna Inc said its experimental Covid-19 vaccine was 94.5% effective in preventing infection based on interim late-state data. Still, downturn risks remain as investors turned cautious after the index rallied sharply by more than 13% this month, and as new coronavirus cases have been surging both at home and abroad, analysts said. The benchmark index had closed at a 29-year high on Monday as well after the economy posted its first expansion in four quarters.
“The market has been overheated by a high-paced rise, and it would be no wonder if stocks go into correction at any time in the short term,” said Maki Sawada, equity market strategist at Nomura Securities.
The S&P 500 and Dow Jones industrial average notched record closing highs on Monday after Moderna Inc became the second U.S. drugmaker to report trial results that far exceed expectations.
Around two-thirds of the 33 sector sub-indexes on the Tokyo exchange traded higher. The airline sector led gains, climbing 3.96%, with ANA Holdings and Japan Airlines adding 4.16% and 3.72%, respectively.
Other cyclical sectors followed, with miners, insurers and iron and steel rising between 2.1% and 3.4%.
Semiconductor Tokyo Electron rose 1.32% to a record high, taking positive cues from its U.S. peers.
Nikkei’s heavyweight Fanuc Corp rose nearly 1.5%, helped by upbeat industrial output data from China and the formation of a regional trade bloc comprising 15 Asia-Pacific economies.
The Mothers Index of start-up firm shares bucked the overall firmness and dropped 3.63%.