Nikkei slides by 3% amid domestic tech slide

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The Nikkei 225 slid by 3% in early trading on Thursday as shares in its domestic large-cap firms took a hit. Some of the biggest losers in the market were chipmaking firm Kioxia, tech-investment firm SoftBank Group Co, and chip-testing equipment maker Advantest.

Other Asian indexes showed a mixed pattern of growth and stagnation.

• ASX 200 — 0.00%
• Nifty 50 — +0.29%
• HSI — +1.35%
• Shanghai — -1.78%

The South-Korean Kospi tumbled 7% in trading as well.

In the view of SGFX research desk, the slide in price comes amid strong volatility in semiconductor and chipmaking companies who have to deal with a memory crunch in the supply chain as the need for compute continues to expand.

The update comes after American stock indexes saw muted gains across its benchmark indexes.

• S&P 500 (SPY) — +0.40%
• NASDAQ (QQQ) — -0.27%
• Dow Jones (DIA) — +0.24%
• Russell 2000 (IWM) — +0.43%

Momentum for public listing remains strong, especially when it comes to AI. Anthropic is reportedly in discussions for its IPO which is expected to be a mega-listing similar in size to SpaceX's IPO. 

Sectorally, ETF performance was mixed. 

Sectors

• Technology — -1.11%
• Health Care — 0.00%
• Real Estate — +0.18%
• Financials — +0.68%
• Utilities — -1.03%
• Communication Services — +1.73%
• Consumer Discretionary — +0.95%
• Consumer Staples — +0.06%
• Industrials — -0.22%
• Energy — -0.79%
• Materials — -0.28%
• Aerospace & Defense — +0.49%
• Biotechnology — +0.65%
• Medical Devices — +1.30%
• REITs — +0.04%
• Semiconductor — -2.23%
• Software — +0.33%

Despite positive earnings from TSMC and ASML, two companies that are known for being essential to the chip making process due to their specialization in foundry services and chip-making machinery, the bullish sentiment was not reflected into Asian semiconductor firms.

Summary

The market's behavior on Wednesday was mixed at best with peak performance from selected companies and broader indexes in Japan and South Korea that reflected a dip. In the view of SGFX research desk, the newest factor semi-conductor companies and technology firms have to deal with is the crunch for compute.

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