Japan's Nikkei average ended at a 10-month high on Monday as domestic buying of Toshiba Corp and other blue chips picked up the slack in the absence of the foreigners who had powered Tokyo's recent rally.
Chip-related shares surged on an improving outlook for the global chip market and the market's overall strength boosted bank shares, but several investors voiced concern about the Nikkei's rapid march toward the important 10,000 level.
The Nikkei ended up 2.59 percent at 9,795.16, its highest closing level since August 27, after earlier rising over three percent to 9,839.90.
Monday's rise added to a 4.9 percent climb last week when the benchmark was boosted by a surprisingly strong "tankan" corporate sentiment survey from the Bank of Japan.
The broader TOPIX index ended up 1.94 percent at 967.04, its highest close since August 26.
"The mindset of investors has changed more than could have been expected," said Minoru Tada, a director at World Nichiei Securities.
"Investors are making money, and we're seeing a virtuous cycle where buying is now inviting more buying...even though many people close to the market are saying the rises are a bit strange considering the current economic fundamentals."
Semiconductor-related shares led the way after Deutsche Securities revised up its outlook for the global chip market to 3.8 percent value growth in 2003 from its previous estimate of a 3.1 percent decline.
The latest indication of improving sentiment in the global semiconductor market helped send electronics conglomerate Toshiba soaring 12.61 percent to 500 yen, its highest level in a year.
Other chip-related shares jumped, with Fujitsu Ltd climbing 12.01 percent to 634 yen, while NEC Corp rose for a seventh straight session to end up 7.82 percent at 800 yen.
NEC had been boosted last week by heavy buying by foreigners attracted by its status as a laggard compared to other tech shares and rising hopes for a recovery in the U.S. market for telecom equipment. Traders said domestic investors were the main drivers on Monday.
"Many foreigners are still on holiday today...but at last we are seeing domestic institutional investors playing catch-up and snapping up blue chips and other large-cap stocks," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities.
U.S. markets were closed on Friday for Independence Day.
A TOKYO STAMPEDE?
Trade picked up a notch, with 1.54 billion shares changing hands on the first section, compared to 1.29 billion shares on Friday. Gainers outnumbered decliners 889 to 515.
Monday was the 28th straight session with over a billion shares swapping hands, the longest such run since the Tokyo Stock Exchange moved to a five-day trading week at the height of Japan's asset bubble in February 1989.
Investors also snapped up bank shares, as the stock market's rally continued to ease fears about the value of their massive shareholdings, while relative calm in the Japanese government bond (JGB) market lessened worries about their bond holdings.
UFJ Holdings Inc, the smallest of Japan's four main banks, rose 13.18 percent to 249,000 yen, while top bank Mizuho Financial Group was up 7.76 percent at 125,000 yen.
Internet investor Softbank Corp was another notable gainer, soaring 14.98 percent to 3,070 yen. Traders said investors were flocking to volatile stocks in the Internet and tech sectors, such as Softbank, hoping to profit from the market's rally.
Furukawa Electric Co, the world's second-biggest fiber-optics maker, jumped 18.62 percent to 497 yen, while Yahoo Japan Corp, 42 percent owned by Softbank, was up 5.98 percent at 1,950,000 yen.
Softbank could receive a further boost later in the week if Yahoo Inc's quarterly earnings impress, while several market players said they expected the Nikkei to break the 10,000 mark for the first time since August by the end of the week.
But some fund managers were not getting carried away.
"Although there are signs of a recovery in the PC and chip markets, the rally in tech shares like NEC is looking a little overdone in terms of valuations," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"But what we have is a kind of stampede, with domestic investors now rushing in to buy in the wake of foreign buying."
Chip-related shares surged on an improving outlook for the global chip market and the market's overall strength boosted bank shares, but several investors voiced concern about the Nikkei's rapid march toward the important 10,000 level.
The Nikkei ended up 2.59 percent at 9,795.16, its highest closing level since August 27, after earlier rising over three percent to 9,839.90.
Monday's rise added to a 4.9 percent climb last week when the benchmark was boosted by a surprisingly strong "tankan" corporate sentiment survey from the Bank of Japan.
The broader TOPIX index ended up 1.94 percent at 967.04, its highest close since August 26.
"The mindset of investors has changed more than could have been expected," said Minoru Tada, a director at World Nichiei Securities.
"Investors are making money, and we're seeing a virtuous cycle where buying is now inviting more buying...even though many people close to the market are saying the rises are a bit strange considering the current economic fundamentals."
Semiconductor-related shares led the way after Deutsche Securities revised up its outlook for the global chip market to 3.8 percent value growth in 2003 from its previous estimate of a 3.1 percent decline.
The latest indication of improving sentiment in the global semiconductor market helped send electronics conglomerate Toshiba soaring 12.61 percent to 500 yen, its highest level in a year.
Other chip-related shares jumped, with Fujitsu Ltd climbing 12.01 percent to 634 yen, while NEC Corp rose for a seventh straight session to end up 7.82 percent at 800 yen.
NEC had been boosted last week by heavy buying by foreigners attracted by its status as a laggard compared to other tech shares and rising hopes for a recovery in the U.S. market for telecom equipment. Traders said domestic investors were the main drivers on Monday.
"Many foreigners are still on holiday today...but at last we are seeing domestic institutional investors playing catch-up and snapping up blue chips and other large-cap stocks," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities.
U.S. markets were closed on Friday for Independence Day.
A TOKYO STAMPEDE?
Trade picked up a notch, with 1.54 billion shares changing hands on the first section, compared to 1.29 billion shares on Friday. Gainers outnumbered decliners 889 to 515.
Monday was the 28th straight session with over a billion shares swapping hands, the longest such run since the Tokyo Stock Exchange moved to a five-day trading week at the height of Japan's asset bubble in February 1989.
Investors also snapped up bank shares, as the stock market's rally continued to ease fears about the value of their massive shareholdings, while relative calm in the Japanese government bond (JGB) market lessened worries about their bond holdings.
UFJ Holdings Inc, the smallest of Japan's four main banks, rose 13.18 percent to 249,000 yen, while top bank Mizuho Financial Group was up 7.76 percent at 125,000 yen.
Internet investor Softbank Corp was another notable gainer, soaring 14.98 percent to 3,070 yen. Traders said investors were flocking to volatile stocks in the Internet and tech sectors, such as Softbank, hoping to profit from the market's rally.
Furukawa Electric Co, the world's second-biggest fiber-optics maker, jumped 18.62 percent to 497 yen, while Yahoo Japan Corp, 42 percent owned by Softbank, was up 5.98 percent at 1,950,000 yen.
Softbank could receive a further boost later in the week if Yahoo Inc's quarterly earnings impress, while several market players said they expected the Nikkei to break the 10,000 mark for the first time since August by the end of the week.
But some fund managers were not getting carried away.
"Although there are signs of a recovery in the PC and chip markets, the rally in tech shares like NEC is looking a little overdone in terms of valuations," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"But what we have is a kind of stampede, with domestic investors now rushing in to buy in the wake of foreign buying."
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