Japan's Nikkei reverses below 60,000 level as profit-taking steps in

By Junko Fujita

TOKYO, April 23 (Reuters) - ‌Japan's Nikkei share average ​reversed ​course on Thursday after briefly topping the 60,000 level, as investors locked in profits from an early rally as the outlook of the war in the ‌Middle East remained unclear.

Investors assessed lingering geopolitical risks and weakening U.S. stock ⁠futures, as oil prices rose in the wake of stalled peace talks between Iran and the United States.

The Nikkei ‌ended 0.75% lower at 59,140.23, after ‌touching a record high of 60,013.98 earlier in the day. Early gains were supported by news of U.S. President Donald Trump extending the ceasefire with Iran.

The broader Topix fell ​0.76% to 3,716.38.

Trump made what appeared to be a unilateral announcement on Tuesday that the U.S. would extend the ceasefire until it had discussed an Iranian proposal to end ⁠the two-month-old war.

But Iranian officials did not say they had agreed to any extension of the truce, and criticized Trump's decision ​to maintain the U.S. Navy blockade of Iran's trade by sea, itself considered by Iran an act of war.

"There are still uncertainties surrounding the ​Middle East war. The Strait of Hormuz is not ‌completely open and the oil prices remain high," said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

"Investors have bought the shares on ⁠optimism for the war's end until now. But for the index to rise further, they need more positive cues."

The Nikkei has recouped all losses since the start of the U.S.-Iran war in late February, ⁠though gains have been driven by a narrow group of artificial intelligence‑related stocks, including SoftBank Group and Advantest.

The ​so-called NT ratio, the Nikkei 225 divided by the broader Topix, hovered at a record high level of 15.91 on Thursday, underscoring how the wider market hasn't kept up with the rally.

Investors booked profits as ‌they weighed declines in S&P 500 and Nasdaq futures in Asia trade, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset ‌Management.　

In Japan, chip-related shares gave up early gains, with Advantest and Tokyo Electron both ending flat.

Technology investor ⁠SoftBank Group narrowed its gains, ending 3.86% ‌higher.

Of the 1,600 shares on ​the Tokyo Stock Exchange's prime market, 21% rose and 75% fell, while 2% closed flat.

(Reporting by Junko Fujita; Editing by Subhranshu Sahu, Sherry Jacob-Phillips and ‌Ronojoy Mazumdar)

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