Global Markets | Japan's Nikkei climbs as AI optimism outweighs Mideast concerns

Japan's Nikkei share average rose on Monday, nearing the all-time high it scaled last week, as optimism over the red-hot artificial intelligence (AI) sector overwhelmed concerns about the Middle East crisis.

The benchmark Nikkei 225 Index rose 0.97% to 59,045.45 by the midday trading ‌break, closing ⁠in ⁠on its record intraday level of 59,688.10 touched on Thursday. The broader Topix climbed 0.67% to 3,786.07.

The benchmark S&P 500 and the tech-heavy Nasdaq both climbed to their third record close in a row on Friday after Iran said it would open the Strait of Hormuz shipping lane for oil.


But hopes ⁠for a ‌lasting ceasefire faded over the weekend after the United States said it had seized an Iranian ⁠ship that tried to run its blockade and Iran vowed to retaliate.

"The trend of major U.S. indices hitting record highs across the board, along with expectations for the AI sector and corporate earnings, are providing support for Japanese stocks," Takayuki Miyajima, senior economist at Sony Financial Group, said in a note.

"Amid a market environment prone to ‌swinging between optimism and pessimism in response to reports on the situation in Iran, the market is likely to see a tug-of-war."

There ⁠were 138 advancers on the Nikkei index against 86 decliners. SoftBank Group, a major investor in AI, and chip-sector supplier Lasertec, were among the sharpest gainers on the gauge, rising 5% and 5.6%, respectively.

The largest losers on the Nikkei were Sumitomo Pharma , down 5.7%, followed by Tokyo Gas, 3.8% lower, and retailer Ryohin Keikaku, which sank 3.3%.