Share prices soared along a broad front Thursday on the Tokyo Stock Exchange, taking market participants by surprise.

The trigger for the surge was the spectacular rally on Wall Street overnight.

The New York rally was so swift that investors jumped on the buying bandwagon.

Still, it remains to be seen whether the uptrend will gather further momentum and lift the Nikkei average back above the recent peak of 11,919.30 set on March 11.

In retrospect, market activity had been subdued through much of last month and this month.

With better-than-expected corporate earnings reports going largely unheeded, the Nikkei average has been seesawing around 11,500 over the past several weeks.

The earnings reports from automakers and consumer electronics manufacturers were particularly impressive, but investors have remained unconvinced.

The market’s reaction has been muted because the improved earnings have settled well within the range of expectations.

A good number of companies, including manufacturers of electronic parts and semiconductors and automakers, had revised their profit projections upward repeatedly before announcing their final earnings reports for fiscal 2001.

A careful analysis of the earnings reports announced so far shows that years of restructuring efforts are beginning to have the desired effects on profits.

But there appears to be a good chance that the improved picture for profits will turn out to be a one-time event.

The benchmark 225-issue Nikkei average appears likely to remain locked within a relatively narrow range between 11,000 and 12,000 in the near term.

Investors are turning increasingly selective, ditching stocks showing few signs of earnings improvement.

Emerging as investors’ favorites are stocks supported by favorable earnings prospects and those expected to benefit from new value-added products.

Specifically, investors are opting for shares of automakers that have raced to their best year ever and growth-oriented companies such as manufacturers of liquid-crystal and plasma displays.

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