Japanese stocks fell, with technology shares taking a hit from a steep selloff in their US peers, while chipmaker Kioxia Holdings Corp. was set to drop after a disappointing profit outlook. The Nikkei 225 Stock Average retreated 0.7% as of 9:08 a.m. in Tokyo, with chip-related shares Ibiden Co. and Sumco Corp. among biggest decliners on the tech-heavy gauge. The broader Topix index was down about 0.8%.
In the US, disappointing tech results triggered a 7.2% plunge in the Philadelphia Semiconductor Index, with Intel Corp. sinking the most in over four decades. In Japan, Kioxia shares were untraded and were set to tumble after saying late Friday it expects an operating profit of ¥2 trillion ($12.7 billion) in the current quarter, falling well short of estimates and suggesting nearly flat quarter-on-quarter price rises. Kioxia’s American depositary receipts plunged 17%. “Kioxia’s disappointing results are likely to fuel concerns that earnings at Japanese tech companies, not just their US peers, are falling short of expectations” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab.
Following the sharp selloff in US technology stocks, AI and semiconductor-related shares in Japan are also likely to come under selling pressure, he said. Investors have intensified their scrutiny of artificial-intelligence bets in recent weeks as global tech hevyweights including Meta Platforms Inc., Alphabet Inc. and Amazon.com Inc. reported earnings. After reaching an all-time high in June, the Nikkei gauge has dropped nearly 13% through Oct. 30, with Kioxia and capacitor maker Taiyo Yuden each tumbling more than 50%.
With Japanese markets closed on Tuesday for a holiday and US midterm election results set to start coming in during Asian trading hours Wednesday, investors may also be reluctant to take on risk. Polls suggest Donald Trump’s Republican Party will lose control of at least one house of Congress.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing