Nikkei Plunges to Briefly Slip below 50,000

Tokyo, Nov. 5 (Jiji Press)–Japan’s benchmark Nikkei stock average plunged Wednesday, briefly slipping below 50,000 on an intraday basis for the first time since Oct. 27. The index finished at 50,212.27, down 1,284.93 points, or 2.49 pct, from Tuesday, after losing more than 2,400 points in the morning. The broader TOPIX index slid 41.85 points, or 1.26 pct, to 3,268.29. On the Tokyo stock market, selling of chip-related issues grew following the weak overnight performance of Wall Street, brokers said. On Tuesday, all major U.S. stock indexes fell as investor sentiment was dampened after top executives at U.S. financial institutions such as Goldman Sachs mentioned the possibility of the stock market entering a correction phase. Concerns about overheating, especially for high-tech stocks, led to profit-taking. Selling dominated the Tokyo market from the outset of Wednesday’s trading, with stocks related to artificial intelligence and semiconductors particularly coming under pressure. An official of a major securities firm said, “As the Nikkei gradually expanded its losses, selling spread to a wide range of sectors, not just AI-related stocks.” In afternoon trading, buying on dips helped the market narrow its earlier losses, according to an official of a bank-affiliated securities firm. Purchases of stocks with strong earnings results also supported the market’s downside, brokers said. Many investors view Wednesday’s plunge as a form of speed adjustment after the Nikkei rose more than 7,000 points in October thanks to expectations for growth of the AI sector. For the market to regain momentum, “it’s necessary to cool down the overheated sentiment to some extent and consolidate the bottom,” an official of another major securities firm said. END [Copyright The Jiji Press, Ltd.]