Even as the Nikkei Average plunged, stocks with strong earnings renewed their year-to-date highs. Amid changes in the external environment, upward earnings revisions and store-opening strategies pushed share prices higher, while domestic-demand and growth stocks formed a two-tiered market under the influence of high-priced technology stocks.
While the Nikkei Average recorded its third-largest decline ever on 6 November, some stocks renewed their year-to-date highs on the back of strong earnings. The main factors were caution over excessive enthusiasm surrounding AI-related stocks and the market's polarization, although the medium- to long-term growth potential of individual stocks was being recognized.
As the Nikkei Average recorded a sharp decline, the structure in which the index is swayed by movements in large-cap, high-priced stocks became apparent. In particular, Advantest, Tokyo Electron and SoftBank Group, 3 stocks, moved the market significantly.
Oriental Land was cited as a representative example of a stock that maintained its high level on the strength of improved earnings. It raised its revenue and operating profit forecasts, announced an increase in its annual dividend forecast and renewed its year-to-date high.
Kotobuki Spirits and Sysmex also advanced despite the headwinds facing the market, supported by strong results, store-opening strategies and improved gross margins, and were seen maintaining high levels even as the Nikkei Average declined.
Overall, the view is that 3 factors, strong earnings, supply and demand, and the flight of funds to safety, are producing stocks that reach new highs even as the Nikkei Average falls.