Japan’s Nikkei Stock Average Snaps 4-day Winning Run as Chipmakers Track US Peers Lower (Update 2)

Reuters

10:27 JST, October 16, 2024 (updated at 16:00 JST)

TOKYO (Reuters) – Japan’s Nikkei share average snapped a four-session winning streak on Wednesday, as chip-related stocks tracked an overnight drop in U.S. peers following demand concerns, with Tokyo Electron slumping more than 9%.

The Nikkei ended 1.83% lower at 39,180.3 points, after crossing the 40,000 level to touch a three-month high in the previous session.

“The Nikkei’s declines reflected the index’s sharp gains in the recent rally,” said Seiichi Suzuki, chief equity market analyst, Tokai Tokyo Intelligence Laboratory.

“After all, the market sentiment is not that strong partly because of the yen’s strength against the dollar from three months ago.”

The yen was at about ¥149 against the dollar in Asian trade, compared with around ¥160 in mid-July when the Nikkei hit a record peak.

Wall Street’s major stock indexes closed lower on Tuesday, with the technology-heavy Nasdaq leading declines after a 1% drop, as chip stocks came under pressure.

U.S. semiconductor stocks slumped after chip equipment maker ASML cut its annual sales forecast over weak non-AI chip demand, while a report said the Joe Biden administration was considering capping sales of advanced artificial intelligence processors to some countries.

Chip-making equipment maker Tokyo Electron ended 9.19% lower to track a 5.3% overnight drop in the Philadelphia SE Semiconductor index.

Technology investor SoftBank Group fell 3.97% and microchip equipment maker Lasertec tanked 13.44%.

The broader Topix fell 1.21% to 2,690.66, with a phone company NTT rising 0.82% to provide the biggest support to the index.

Insurers MS&AD Insurance Group and Tokio Marine Holdings rose 1.26% and 0.05%, respectively.

The insurance sector climbed 0.35% higher to become the best performer among the Tokyo Stock Exchange’s 33 industry sub-indexes.

Topix’s growth stock index, which includes high-flying technology stocks, fell 1.75%. The value shares index, which tracks stocks with slow growth but higher dividend payouts, slipped 0.67%.