Japan's Nikkei pulls back from record high on AI selloff
Japan’s Nikkei index fell 1.83% to 67,149.15 on Thursday after AI-related stocks were sold off following Broadcom’s missed revenue expectations, while geopolitical tensions in the Middle East also dampened investor sentiment. The broader Topix dropped 1.28%, with SoftBank Group plummeting 10% and chip-related stocks underperforming, though Tokyo Electron and Disco saw gains.
Japan’s Nikkei share average retreated from a record high on Thursday, declining 1.83% to 67,149.15 by 0143 GMT. The selloff was driven by AI-related stocks after Broadcom reported second-quarter revenue below Wall Street expectations, triggering a broader market correction. The broader Topix index also fell 1.28% to 3,944.95, with 64% of stocks on the Tokyo Stock Exchange’s prime market declining. SoftBank Group led the downturn, dropping 10% and becoming the Nikkei’s largest percentage loser. Chip-related stocks underperformed, with Ibiden and Fujikura falling 7.3% and 5.8%, respectively, though Tokyo Electron rose 1.18% and chip designer Disco climbed 4%. Analyst Shuutarou Yasuda noted that while Broadcom’s miss prompted the selloff, fundamentals for chip and AI-related shares remain strong. The Nikkei had closed above 68,000 for the first time on Wednesday, buoyed by AI optimism, but concerns over Middle East tensions—including renewed US-Iran hostilities and stalled Tehran-Washington talks—weighed on risk sentiment. Oil prices rose around 2%, and Wall Street’s S&P 500 fell 0.7% overnight. The shipping sector was the top performer, climbing 1.48%, while technology and chip stocks faced pressure. Yasuda suggested AI and chip-related shares will remain investor targets despite short-term volatility. The Nikkei had traded over 8% above its 25-day average the prior session, signaling potential overheating before Thursday’s correction.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.