Nikkei ends losing streak as chip sector shares rise

On Thursday, Japan’s Nikkei index rebounded, marking its first ascent in four sessions. Chip stocks, initially down, reversed their losses, and banking shares saw gains.

Closing at 38,079.70 points, the Nikkei climbed by 0.31 percent after dipping by 0.83 percent earlier in the session. Despite this rise, the index still faced a weekly decline of 3.65 percent, poised for its largest weekly drop since December 2022.

Conversely, the broader Topix index also turned around early losses, ending the day with a 0.54 percent increase.

While the Nikkei is down for the week, it boasts a 13.79 percent gain over the year. Although it reached a record high of 41,087.75 points on March 22, it subsequently experienced a 7.61 percent drop by Wednesday’s close.

The current season of profit-taking began with retail companies releasing early reports this month. Looking ahead, technology company reports are slated for release next week, with the bulk of company reports expected in mid-May.

Initially, Japanese semiconductor stocks faced declines on Thursday following a disappointing announcement from Dutch chip equipment manufacturer ASML regarding new bookings on Wednesday. However, hopes for strong profits from Taiwanese chip manufacturer TSMC later lifted sentiment. TSMC reported an estimated nine percent increase in net profit just before the Tokyo Stock Exchange closed, leading to a reversal in chip stocks’ fortunes. Advantest, a chip testing equipment maker, emerged as the best-performing stock on the Nikkei, surging over 5 percent after initially reversing a 2.5 percent decline.

Additionally, regional bank shares contributed to the market’s positive performance, with Concordia Financial Group, Chiba Bank, and Fukuoka Financial Group all posting notable gains of 4.82 percent, 3.46 percent, and 3.04 percent, respectively.