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Japan's Nikkei ends nearly 3% higher as AI-related stocks advance

By Reuters News

By Junko Fujita

TOKYO, Nov 10 (Reuters) - Japan's Nikkei share average ended nearly 3% higher on Tuesday, extending its rebound from a tech-led selloff on Friday as AI-related stocks surged.

The Nikkei .N225 rose 2.87% to 60,459.58, recouping Friday's sharp losses in the past two sessions. The broader Topix .TOPX was up 1.98% at 3,893.71.

"The Nikkei's sharp gains in the latest two sessions are a surprise," said Kazuaki Shimada, chief strategist at IwaiCosmo Securities.

"But the gains were limited as investors would not want to bet the Nikkei to cross 61,000."

The Nikkei fell nearly 6% on Friday as AI-related stocks dropped on concerns that the US Congress could slow AI investment following the Democrats' landslide victory in the midterm elections.

On Tuesday, technology investor SoftBank Group 9984.T surged 13.88%, while chip-related Advantest 6857.T and Tokyo Electron 8035.T rose 4.63% and 6.05%, respectively.

The gains came despite a 4.2% overnight fall in Nvidia NVDA.O amid controversy surrounding CEO Jensen Huang.

"The market so far sees the impact of the issue as limited to Nvidia rather than the broader industry," said IwaiCosmo's Shimada.

Memory-chip maker Kioxia 285A.T jumped 9.23%.

Some investors sold Kioxia shares purchased on margin on Friday to avoid margin calls. Outstanding margin-buying positions fell to 48.22 million shares from 52.85 million a day earlier, Tokyo Stock Exchange data showed.

Kioxia accounts for a significant share of outstanding margin-buying positions after emerging as a key driver of the Nikkei’s rally to a record high in June. The stock has since been hit by weakening sentiment toward AI-related shares, touching a seven-month low on Friday.

JX Advanced Metals 5016.T rose 4.64% after the maker of chip materials raised its net profit forecast for the year ending next March by 14%.

Toyota Motor 7203.T fell 2.21% and was the biggest drag on the Topix.

Fujikura5803.T was up 0.29%, giving up most of early gains after the fibre optic cable maker lowered its annual operating profit forecast.

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