Updated March 5th, 2024 at 08:19 IST

Nikkei retreats from record high as chip stocks dip

Despite the pullback, the Nikkei had broken through the 40,000 level for the first time on Monday, marking a 19 per cent rise since the beginning of the year.

Reported by: Business Desk
Nikkei | Image:Shutterstock
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Nikkei falls: Japan's Nikkei share average on Tuesday witnessed a decline as investors opted to sell chip-related stocks, aiming to secure profits following a robust rally that propelled the benchmark index to a record peak in the previous session. 

As of 02:16 GMT, the Nikkei was down 0.45 per cent at 39,928.90.

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Jun Morita, the general manager of the research department at Chibagin Asset Management, explained, "Investors sold the chip-related shares which were heavily bought in the rally, after Wall Street fell overnight." 

The move followed a downturn in the three main indexes in the US, as investors took a cautious stance ahead of key economic data releases and Federal Reserve Chair Jerome Powell's congressional testimony.

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Despite the pullback, the Nikkei had broken through the 40,000 level for the first time on Monday, marking a 19 per cent rise since the beginning of the year. 

Morita noted, "Overall investors demand for Japanese stocks is firm, expanding their targets to a wide range of stocks," which contributed to the Topix index trading in positive territory, cutting its early losses to trade 0.1 per cent higher at 2,708.99.

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Chip-testing equipment maker Advantest recorded a 3.9 per cent decline, emerging as the top drag on the Nikkei, followed by chip-making equipment maker Tokyo Electron, which fell 0.74 per cent. Air-conditioning maker Daikin Industries also dropped 2.1 per cent.

In contrast, Obayashi Corp surged 18 per cent after the company raised its dividend forecast, with peers Kajima Corp and Taisei Corp rising 6.87 per cent and 5.6 per cent, respectively. 

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The construction sector emerged as the top performer among the Tokyo Stock Exchange's 33 industry sub-indexes, rising by 2.4 per cent.

Fast Retailing provided the biggest support to the Nikkei, edging up by 0.5 per cent, following news that the Uniqlo-brand clothing store operator reported a 7.2 per cent rise in existing store sales for February compared to the previous year.

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Among the 225 Nikkei components, 102 stocks witnessed gains, while 119 stocks fell, with four remaining flat.

(With Reuters Inputs)

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Published March 5th, 2024 at 08:19 IST