TOKYO: Japan’s Nikkei share average fell on Friday, heading for its biggest weekly drop since early April, as heavyweight tech stocks tracked an overnight decline in US peers on stretched valuation concerns.
The tech-heavy Nikkei slid as much as 2 per cent, and was last down 1.8 per cent at 49,955.08, slipping below the psychologically key 50,000 mark.
Startup investor SoftBank Group dropped 8.4 per cent and chip-testing equipment maker Advantest, a Nvidia supplier, slumped 7 per cent, making them the Nikkei’s top two decliners in index-point terms.
The broader Topix lost 0.8 per cent to 3,286.16.
Overnight, investors returned to selling the darlings of the artificial intelligence-fuelled rally that carried Wall Street, Tokyo and other global bourses to successive record peaks in recent months. Nvidia slid 3.7 per cent and AMD dropped 7.3 per cent.
The Nikkei was headed for its worst week since the April tariff shock as the share gauge pulled back from a record peak touched on Tuesday. It was last down 4.7 per cent for the holiday-shortened week.
In October, the benchmark index rallied 16.6 per cent to record its best month in 35 years.
“Rather than a change in the way investors fundamentally view AI stocks, there is this risk-off mood around how fast these stocks have rallied,” said Nomura Securities strategist Fumika Shimizu.
Corporate results are also key for the market now, with Japan’s earnings season currently in full swing, she said.
The three biggest percentage decliners on the Nikkei on Friday all posted disappointing financial results. Environmental equipment supplier Kanadevia tumbled 20 per cent and confectionary maker Ajinomoto and electronic component manufacturer Taiyo Yuden each shed more than 16 per cent.
The biggest percentage gainer was also driven by corporate results, with HR technology firm Recruit Holdings jumping 15 per cent.
Embattled automaker Nissan Motor got some respite after reporting a return to operating profit. Its shares climbed 5.3 per cent.
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