Japan's Nikkei stock index surged 1. 95 percent Tuesday as stocks here mirrored Wall Street's record overnight rally and were further supported by yen's depreciation. Traders here said that investors were snapping up shares deemed oversold recently, enlivened by the 30-issue Dow Jones Industrial Average jumping overnight Monday to a record closing high for the second consecutive day. Major bourses in Europe also performed well, which added further support to the market here brokers said, although some said that buying Tuesday was selective, despite shares here are still widely regarded as being undervalued. "There was selective buying of stocks after companies announced good earnings results, but overall Tuesday's rise thanks to the higher U.S. stock prices," said Kenji Shiomura, a strategist at Daiwa Securities. "Japanese stocks are still undervalued and it's no wonder that they are being bought back," he said. Other analysts, as has recently been the case, suggested that in terms of earnings season coming to a close and the results having been largely factored in, investors were now looking for further incentives to chase assets higher. Prime Minister Shinzo Abe's announcement in June on his government's economic growth strategy has been keeping some longer- term investors on the sidelines of late, and those looking to cover their short-term positions were eyeing a slew of economic data due out from the U.S. overnight. Both situations were accounting for the relatively thin volume of trade Tuesday, analysts said. "It appears that today's rebound was driven mainly by short- covering by those who were expecting the Nikkei to fall below 14, 000," said Shoichiro Yamauchi, an equity market strategist at Nomura Securities Co. He added that U.S. economic data due out later in the day, including retail sales for April, are being keenly eyed, as robust U.S. figures will likely lead the dollar to strengthen against the yen, giving a boost to export-oriented shares here. The Nikkei Stock Average ended up 275.92 points from Monday to finish at 14,425.44, while the broader Topix index gained 20.44 points, or 1.77 percent, to close at 1,178.35. Nissan Motor was a notable advancer Tuesday, accelerating 5.06 percent to 913 yen, following announcing its full-year net profit jumped 14.0 percent, but Hitachi dropped 2.9 percent to 710 yen as its projection of a five percent increase in operating profit in fiscal 2014 to a record high did little to attract buying as investors seemed fairly ambivalent. Sharp gained 15 percent to 272 yen after reporting that it has returned to the black in fiscal 2013 for the first time in three years, with a net income of 11.6 billion yen (114 million U.S. dollars), more than double its own forecast. The Osaka-based company said it also expects its net profit to triple in the coming year, owing to increased consumer and corporate demand for the firm's smartphones, LCD displays, solar panels and batteries. The firm reported that sales during the recording year had increased by 18 percent to 2.93 trillion yen, compared to the record group net loss of 545.35 billion yen, the firm posted the year before and operating losses of more than 146 billion yen. The once-ailing consumer electronics maker said that major restructuring efforts had helped to turn the company around, including slashing personnel and selling stakes in its LCD business, as well as the yen's comparative weakness helping the company to boost its overseas earnings. "We made a relatively good start in the first year of our medium-term business plan," Sharp President Kozo Takahashi told a press conference in Tokyo Monday. "We'd like to build a company structure that is capable of swiftly coping with changes in market conditions and the environment," Takahashi said, adding that the company still faces some challenges including its solar battery operation, which is likely to become unprofitable this business year. Meanwhile, Mitsubishi Chemical Holdings closed in positive territory, gaining 2.2 percent to 412 yen, after reports the company will purchase a majority stake in Taiyo Nippon Sanso Corp. Taiyo Nippon Sanso, for its part, who will receive nitrogen from Mitsubishi for use in its U.S.-based chemicals projects, jumped 10. 9 percent to close at 889 yen. Trading volume on Tuesday rose to 1.99 billion shares on the Tokyo Exchange's First Section, up from Monday's volume of 1.82 billion shares, with advancing issues outnumbering declining ones by 1,367 to 337.