TOKYO, Dec.28 (Reuters) – Japanese stocks surged on Tuesday, led by heavyweight tech stocks, after strong U.S. retail sales data led Wall Street to a strong end of the day at next day and alleviated some fears regarding the Omicron COVID-19 variant.

Also fueling risk sentiment, data showed an increase in output at Japanese factories in November, as auto sector output benefited from a pickup in global parts supplies. Read more

The Nikkei stock average (.N225) rose 1% to 28,956.90 at 0220 GMT, after advancing 1.6% to exceed the 29,000 level for the first time since December 16.

The larger Topix (.TOPX) gained 0.89% to 1,995.37.

Wall Street’s S&P 500 Index (.SPX) finished at an all time high on its fourth consecutive day of gains, as an e-commerce-fueled retail sales boom in the United States underscored economic strength and allayed concerns over Omicron-induced flight cancellations that hit travel inventories.

“Sentiment is strong with the gains in US equities last night. The Japanese market will maintain momentum if the US market remains strong,” said Takatoshi Itoshima, strategist at Pictet Asset Management.

“But most of the participants are short-term investors, with many long-term investors away for the holiday season, these investors can sell stocks for profit if the market continues to rise.”

Tech stocks led the gains, with chipmaking equipment maker Tokyo Electron (8035.T) up 1.77%, air conditioner maker Daikin Industries (6367.T) up 2.21 % and robot maker Fanuc (6954.T) up 1.81%.

Precision Manufacturers (.IPRCS.T) won the most among the 33 sub-indexes in the exchange industry, with optical glass maker Hoya up 1.36% and medical equipment maker and of Olympus cameras (7733.T) up 3.22%.

Kewpie (2809.T) rose 2.2% after the mayonnaise maker raised its annual profit and dividend forecast.

Casual clothing retailer Shimamura (8227.T) jumped 4.6% after posting a 25% jump in nine-month net profit.

Reporting by Junko Fujita; Editing by Devika Syamnath

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