Japan's Nikkei jumps as tech results revive AI optimism

TOKYO: Japan’s Nikkei share gauge jumped on Wednesday, as results from technology firms reinvigorated optimism in the AI sector.

The benchmark Nikkei 225 advanced 1.26% to 64,067.10 at the midday break. The broader Topix slipped 0.02% to 3,996.53.

The S&P 500 rose 0.60% and the Nasdaq gained 1.18% on Tuesday, with technology leading sector gains and energy lagging. Meta Platforms fell overnight after it increased its equity fundraising to $97.5 billion to fund AI expansion, with Nvidia and AMD committing to the offering.

On Wednesday, South Korean chipmaker SK Hynix announced shareholder returns of about $75 billion after reporting a more than seven-fold rise in quarterly profit.

With AI-related companies, a pattern is emerging where shares tend to decline on news of massive spending and fundraising, whereas signs of increased profitability push the stock prices higher, said Maki Sawada, an equities strategist at Nomura Securities.

“As we head into the weekend, a series of earnings announcements from closely watched semiconductor-related stocks are due, so we expect selective trading based on these results to intensify,” Sawada said.

Investors also looked ahead to the Federal Reserve rate decision, due later on Wednesday, with markets pricing in a hold and a high probability of a December hike.

There were 86 advancers on the Nikkei 225 against 138 decliners.

The largest percentage gainers in the index were Kioxia Holdings, up 12.97%, followed by Taiyo Yuden, 8.41% higher, and Ibiden, which gained 7.00%.

The largest losers were Capcom, down 11.80%, followed by Konami Group, 6.76% lower, and Canon , which lost 5.83%.