(Bloomberg) -- Shares of Japanese utilities extended a rally on the back of hot summer weather that is driving demand for cooling and pushing spot electricity prices higher.
The country’s top power generator Tokyo Electric Power Co. jumped as much as 12%, the most since May 6. The stock was among the biggest gainers by percentage change in Japan’s benchmark Topix Index. Kansai Electric Power Co. and Chubu Electric Power Co. rose as much as 3.1% and 2.9%, respectively.
Investors are seeing an opportunity from Japan’s power crisis. Temperatures in Tokyo soared last week, resulting in the most severe heatwave for the end of June in records going back to 1875. Electricity prices are expected to remain higher for much of the summer, as scorching hot weather in July and August may envelop the entire country.
Related story: Tokyo Heatwave Hints at Even Bigger Power Crunch for Summer Peak
The wholesale power spot price for Tokyo has been higher than other regions for much of last week, which is slated to boost Tepco’s profits. The nationawide wholesale spot power price for next-day delivery was priced at 32.45 yen a kilowatt-hour on Monday.
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