Shares on the Riverton stock exchange closed at a record high on Thursday after a string of technology companies reported stronger-than-expected quarterly results. The main RX30 index rose 2.4 percent to 4,086 points, finishing above 4,000 for the first time in its history.
The rally was led by Halvard Microsystems, a Northvale maker of chip-manufacturing equipment, whose shares jumped 11 percent after it raised its full-year sales forecast. Riverton software group Valecore gained 8 percent on rising demand for its artificial intelligence tools, used by banks and insurers to process documents and detect fraud.
Technology leads, others follow
Technology stocks now make up nearly a quarter of the index, compared with about a tenth five years ago. Analysts said investors were rewarding companies that can show artificial intelligence is turning into real revenue rather than promises.
This season, companies had to show the money, and the tech sector did. Investors are no longer paying for stories; they are paying for contracts.
Elif Demir, chief market strategist at Harborline Bank
Banks also gained, helped by expectations that interest rates will stay stable through the winter. Energy companies were mixed, and shares of two retailers fell after they warned that household spending had slowed.
On the giant screens above the exchange’s entrance on Market Street, green outnumbered red by roughly three to one at the close.
Is it a bubble?
Not everyone is celebrating. Some fund managers warned that valuations in the technology sector have risen faster than profits, and that a single disappointing forecast could trigger sharp losses across the sector.
“Records feel good, but they are also the moment to check your risk,” said Paul Andersen, an independent market analyst in Port Alden. “When an index depends this heavily on a handful of names, a bad week for one of them is felt everywhere.”
The central bank said in its latest financial stability report that it was watching stock valuations closely but saw no immediate risk to the financial system.
What to watch
More results are due next week, including from the country’s largest telecom operator and two major banks. Investors will also watch the monthly inflation figures, due on Tuesday, for clues about the central bank’s next move.
Comments 0