Nikkei falls 0.8% as chip stocks retreat on AI caution

Japan’s benchmark Nikkei index declined on Thursday, weighed down by semiconductor equities that surrendered gains from the previous session. The drop reflects growing investor caution regarding artificial intelligence-related expenditure forecasts for the coming year.

Semiconductor sector pressure

According to Reuters, shares of US-based Lam Research, a manufacturer of semiconductor equipment, slipped in after-hours trading despite reporting strong overall results following Wednesday’s close on Wall Street. Kazuyoshi Saito, an analyst at Iwai Cosmo Securities, pointed to concerns about demand originating from China.

By 01:37 GMT, the technology-heavy Nikkei had fallen 0.8% to reach 64128.54 points. This marks a reversal from its 0.9% rise recorded during Wednesday’s trading session.

Broader market performance

In contrast, the wider Topix index remained stable, having also advanced 0.9% in the prior session. Within the Tokyo Stock Exchange, the services sector delivered the strongest performance among the 33 industry groups, climbing 2.2%.

European equities rebounded on Wednesday, recovering nearly all losses incurred since the disturbances in France earlier in the week. Strong earnings reports encouraged investors to overlook prevailing economic and political uncertainty.