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The Nikkei rose 2.88% to 60,471.05 by 0158 GMT, recovering most of the losses suffered during Friday’s steep decline over the past two trading sessions. The broader Topix index advanced 2.27% to 3,904.67.
The rebound followed a nearly 6% slump in the Nikkei on Friday, when AI-related stocks came under heavy selling pressure amid concerns that the US Congress could slow investment in artificial intelligence following the Democrats’ decisive victory in the midterm elections.
Read more: Global Market Today: Asian stocks rally after US tech surge, oil slump
According to Reuters, the latest gains were driven by renewed buying in technology and semiconductor stocks, although investors remained cautious about the possibility of the Nikkei crossing the 61,000 mark.
Technology investor SoftBank Group surged 14.38% on Tuesday, while semiconductor equipment makers Advantest and Tokyo Electron gained 4.93% and 5.66%, respectively. Memory-chip maker Kioxia jumped 7.6%.
The gains came despite Nvidia shares falling 4.2% overnight amid controversy surrounding its CEO Jensen Huang. However, investors appeared to view the developments as largely company-specific rather than a broader threat to the artificial intelligence industry, Reuters reported.Read more: US stocks: Dow rockets 1,100 points, S&P over 2% as oil slide cools inflation worries; Nvidia slumps
Kioxia’s rally also came as some investors unwound leveraged positions following Friday’s selloff to avoid margin calls. Outstanding margin-buying positions in the stock declined to 48.22 million shares from 52.85 million a day earlier, according to Tokyo Stock Exchange data.
Kioxia accounts for a significant portion of outstanding margin-buying positions after emerging as a major contributor to the Nikkei’s rally to a record high in June. The stock has subsequently faced pressure amid deteriorating sentiment towards AI-related shares.
Elsewhere, JX Advanced Metals rose 2.2% after the semiconductor materials maker raised its net profit forecast for the financial year ending next March by 14%.
However, gains across the broader market were not uniform. Toyota Motor fell 1.63%, making it the biggest drag on the Topix, while soy sauce maker Kikkoman plunged 13% to become the biggest percentage loser on the Nikkei.
(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)
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