Japan’s Nikkei hits record high; Lloyds and Rolls-Royce profits surge – business live | Business

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Japan’s main stock index has hit an all-time closing high, ahead of the previous record set in 1989, surging on optimism about the AI boom spread by bumper results from the US chipmaker Nvidia.

The Nikkei rose 2.19% to end the day at 39,098.68. On the final trading day of 1989, it had closed at 38,915.87. The 34 years it has taken to regain its footing is a decade longer than it took Wall Street to recoup losses from the 1929 crash and Great Depression.

Tsutomu Yamada, senior market analyst at Abu Kabucom Securities in Tokyo, told Reuters:

For us traders, this markets the arrival of a new era. It feels like the stock market is telling us that we’ve finally escaped from deflation and a new world has opened up.

This morning here in London, we’ve had buoyant figures from Lloyds Banking Group and the aircraft engine maker Rolls-Royce. Lloyds’ annual pre-tax profits jumped 57% to £7.5bn, even though the UK bank put aside £450m for potential fines and compensation for motor finance customers, after the UK regulator opened a probe into whether consumers had been charged inflated prices for car loans. Profits at Rolls-Royce more than doubled last year to £1.6bn.

Last night, after US markets closed, Nvidia beat expectations again and reported sales of $22b.1n for the fourth quarter of last year, up 22% from the quarter before, and an eye popping 265% higher than in the same period the year before. And for the current quarter, it said it will deliver $24bn sales.

The chief executive and company founder Jensen Huang said:

Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.

Nvidia shares jumped 10% in after hours trading.

Josh Gilbert, market analyst at trading platform eToro, said:

Nvidia reasserted its place in the Magnificent 7 with another blowout quarter showing that AI use cases are exploding, and the AI boom is showing no signs of slowing down.

The big question for investors is, can this continue? Put simply, yes. Nvidia continues to deliver in every way, and its results show there is still plenty of growth ahead. This isn’t just a flash in the pan, nor a bubble, but a business that continues to make serious cash.

Despite the risks from issues in China and ongoing competition, that can pose headwinds moving forward, Nvidia raised its guidance for the next quarter to $24bn in revenue, putting it on track to nearly $100bn in sales over the next year.

Also last night, the US Federal Reserve’s minutes of its last meeting showed that policymakers were not eager to cut interest rates at that meeting, and expressed optimism and caution on inflation. They also modified the post-meeting statement to signal that rate cuts would only occur when the federal open market committee had “greater confidence” that inflation was diminishing.

Stephen Innes, managing partner at SPI Asset Management, said:

Sure, the minutes were a tad outdated, but they certainly skewed much more cautiously than when [Fed president Jerome] Powell told reporters late last month that a March rate cut was still possible, at least in the market’s view.

The Agenda

• 8.15am-9am GMT: HCOB PMI flash for February for France, Germany, eurozone

• 9.30am GMT: UK S&P global PMI flash for February

• 10am GMT: Eurozone inflation for January (forecast: 2.8%)

• 12.30pm GMT: European Central Bank monetary policy meeting accounts

• 1.30pm GMT: US Initial jobless claims for week of 17 February

• 2.45pm GMT: US S&P Global PMI flash for February