Nikkei falls: Japan's Nikkei share average on Tuesday retreated from its recent record high, influenced by a reversal in chip-related stocks. Despite this, gains in traditional sectors like steel makers helped limit the overall losses.

The Nikkei declined by 0.15 per cent to 39,173.92 during the morning session, ending a two-session rally. 

Earlier in the session, the index had surged by as much as 0.5 per cent to reach a record high of 39,426.29.

Heavyweights in the chip sector, including Advantest and Tokyo Electron, saw early gains evaporate, with declines of 2.69 per cent and 0.69 per cent, respectively, becoming the primary drags on the Nikkei's performance.

Conversely, shares in traditional industries experienced gains, lifting the broader Topix by 0.34 per cent to 2,682.74.

Shigetoshi Kamada, general manager at the research department of Tachibana Securities, noted a shift in investor focus during the current session towards value stocks, perceived as reasonable investments. 

The sentiment drove gains in value stocks and could potentially propel the Topix to a record high, possibly lifting the Nikkei towards the 42,000 level.

The Topix index of value shares outperformed, rising by 0.59 per cent, compared to the 0.09 per cent gain in the index for growth stocks, which includes companies with high earnings potential, such as chip-related stocks.

Among traditional sectors, steel makers emerged as top performers, with Kobe Steel and Nippon Steel rising by 3.6 per cent and 3.21 per cent, respectively.

The brokerage sector and the banking sector also saw gains, rising by 2.02 per cent and 2.04 per cent, respectively.

Trading firms displayed mixed performances following billionaire investor Warren Buffett's Berkshire Hathaway's increased stake in Japan's top five trading firms to around 9 per cent. 

While Mitsui & Co rose by 1.11 per cent, Mitsubishi Corp saw a slight decline of 0.12 per cent, and Itochu Corp edged up by 0.42 per cent.

(With Reuters Inputs)