Profit taking drops Japan’s Nikkei index to its lowest level in a week economy

The Japanese Nikkei index fell today, Tuesday, to its lowest level in a week, abandoning the barrier of 70,000 points for the first time since last Wednesday, as investors moved to take profits following a wave of record rises led by artificial intelligence and semiconductor stocks.

The Nikkei index fell by 3.6% to close at 69,788.38 points, while the broader Topix index fell by 2.6% to 3,990.38 points.

This decline came after a strong rise that pushed the Japanese index to exceed the level of 72 thousand points for the first time, just two sessions after it breached the level of 71 thousand, driven by a broad buying wave in shares of artificial intelligence and semiconductor companies.

“After a series of gains, the market seems to be witnessing some profit-taking,” said Masahiro Ichikawa, chief market analyst at Sumitomo Mitsui DS Asset Management.

The trading session witnessed a decline in 184 stocks out of 225 stocks listed on the Nikkei index, compared to an increase of only 41 stocks.

Winners and losers

Artificial intelligence-related stocks, which were the main driver of the recent upward wave, topped the list of losses, just before Micron Technology announced its results.

Shares of Kioxia, a manufacturer of memory chips, fell by 15.1%, while shares of SoftBank Group, which invests heavily in the technology sector, fell by 10.1%.

On the other hand, the shares of Fujikura Company, which specializes in manufacturing cables and optical fibers, rose by 5.3%.

Among the stocks that declined the most were:

• Cable and components maker Furukawa Electric fell 15.5%.
• Shares of non-ferrous metals producer Mitsui Kenzoku fell by 12.6%.

As for profitable stocks:

• Shares of Meiji Holdings, which specializes in dairy and confectionery products, rose by 3.5%.
• The shares of Nichiri, which operates in logistics services, rose by 3.1%.

This decline comes after an unprecedented wave of gains that pushed the Japanese market to historic levels, in light of investors’ continued interest in technology stocks related to artificial intelligence, before profit-taking operations led to a broad correction wave in the market.