The Tokyo stock market has rung in 2002 on a positive note, stirring hope over the prospects of high-priced activity in the months ahead.

Although fears over the nation's economic prospects remain intact, the market is starting to count on an anticipated upturn in gross domestic product, industrial production and other macroeconomic activities in the first quarter.

Viewed from a longer-term perspective, however, the mood is still gloomy.

With last year's share-price volatility fresh in memory and the structural reforms advocated by Prime Minister Junichiro Koizumi still on the drawing board, a sustained rally appears unlikely.

The nation's banking system remains overburdened by bad loans. There are also lingering worries over the bleak earnings prospects of large-capitalization issues, which have plummeted to historically low levels.

But hope springs eternal.

Many investors are opting once again for "new economy stocks." Among these are semiconductor issues, electronic parts issues, consumer electronics issues and other high-technology stocks.

Investors seem to be reaffirming their confidence in these shares, which are supported by favorable earnings prospects. Buying interest is also spreading to auto, precision instrument and consumer electronics issues, with the yen's fall against the dollar having helped export-oriented firms improve their global competitiveness.

"Old economy" shares are being spurned, however, widening the schism between surging information technology stocks and sagging traditional issues.

Although it seems inevitable that corporate profits will decline further during the first half of fiscal 2002, many companies are painting a bright earnings picture for the second half of the year.

Investors seek clues regarding foreign investment in the months ahead.

After vying for market leadership for months on the Japanese stock exchanges, foreign investors turned net sellers for the first time in seven weeks in the second week of last month.

Nonresidents sold 481 billion yen more than they bought, the largest net sales figure in 19 months, more than offsetting their net purchases over the previous six weeks.