World markets surge as Japan's Nikkei soars post-election triumph | AP News
BANGKOK (AP) -- Global markets experienced a surge on Monday, with Tokyo's Nikkei 225 share index skyrocketing up to 5% to a record high, following Japanese Prime Minister Sanae Takaichi's governing party securing a two-thirds supermajority in a parliamentary election.
In early European trading, key indices like Germany's DAX, Paris' CAC 40, and Britain's FTSE 100 all saw positive gains, with the DAX rising 0.6% to 24,864.59, the CAC 40 up 0.2% to 8,288.06, and the FTSE 100 climbing 0.3% to 10,399.61.
U.S. futures mirrored this upward trend, with the S&P 500 futures adding 0.1% and Dow Jones Industrial Average futures up 0.2%. This followed a strong U.S. stock market performance on Friday, where the S&P 500 rallied 2%, the Dow soared 2.5%, and the Nasdaq composite leaped 2.2%.
The positive sentiment was attributed to a tech-stock rebound, Wall Street's rally, and other optimistic news, which collectively boosted shares early on Monday.
In Tokyo, the Nikkei 225 closed at 56,363.94, a 3.9% increase, with an intraday high of 57,337.07 earlier in the day.
The dollar weakened against the Japanese yen, trading at 156.71 yen, down from 157.10 yen on Friday.
The election victory grants Takaichi a stronger mandate to implement market-friendly policies. NHK's vote count results revealed that Takaichi's Liberal Democratic Party (LDP) secured 316 seats, surpassing the 261-seat absolute majority in the 465-member lower house. This marks the LDP's most significant win since its foundation in 1955, surpassing the previous record of 300 seats in 1986.
Neil Newman, from Astris Advisory Japan, commented that the LDP's transformation from a weak government to a strong one with a supermajority in the lower house empowers them to take decisive actions.
Takaichi's immediate focus is on a budget bill, delayed by the election, to fund economic measures addressing rising costs and sluggish wages.
Market analysts like Stephen Innes from SPI Asset Management noted that the election result removes political ambiguity, a premium factor for traders, and grants Takaichi political freedom to make decisions without compromise.
Other Asian markets mirrored the positive sentiment, with Seoul's Kospi gaining 4.1%, Hong Kong's Hang Seng index up 1.8%, and Shanghai's Composite index rising 1.4%. Taiwan's Taiex and Australia's S&P/ASX 200 also saw significant gains.
Wall Street's rally was driven by gains in computer chip companies, with Nvidia up 7.8% and Broadcom climbing 7.1%. However, the S&P 500 experienced its third losing week in four, facing concerns about Big Tech spending and AI's potential impact on software companies.
Bitcoin recovered, rising 1% to trade just below $70,000, after a weekslong plunge that sent it to near $60,000.
Metal prices stabilized after wild swings, with gold up 1.4% to $5048.90 per ounce and silver adding 6.2% to $81.64.
U.S. benchmark crude oil prices dropped 60 cents to $62.95 per barrel, while Brent crude fell 60 cents to $67.45 per barrel.
The euro strengthened to $1.1866 from $1.1814.
AP videojournalist Mayuko Ono in Tokyo contributed to this report.
