Japan's Nikkei slumps over 3% as chipmakers, Middle East turmoil weigh

Shin-Etsu Chemical

19/04/2024 04:11

TOKYO, April 19 (Reuters) - Japan's Nikkei share average
dropped more than 3% on Friday to their lowest levels in more
than two months as chip-related stocks tracked losses in
Taiwanese chipmaker TSMC, while an escalation in the Middle East
turmoil also dented risk appetite. 
    The Nikkei  .N225  fell to 36,733.06, its lowest level since
Feb. 8, before ending the morning session down 3.31% at
36,818.81. The benchmark index was on course to lose 6.8% for
the week, if losses hold. 
    The broader Topix  .TOPX  lost 2.78% to 2,603.07, and was
set to post a 5.6% weekly loss. 
    "The Nikkei was weak as chip shares tanked after TSMC's
earnings. And the index extended losses on the news about the
Middle East turmoil," said Shuji Hosoi, senior strategist at
Daiwa Securities.
    Traders maintained a cautious stance after reports of a
sharp escalation in Middle East hostilities. ABC News cited a
U.S. official in reporting Israeli missiles had hit a site in
Iran, while Iran's Fars news agency said explosions were heard
at an airport in the city of Isafahan. 
    Taipei-listed shares of TSMC  2330.TW  fell around 6% on
Friday following the company's first-quarter earnings report
where it retained its capex and full-year revenue outlook and
flagged only a gradual recovery for the chip sector.
    Chip-making equipment maker Tokyo Electron  8035.T  tanked
7.76% to become the biggest drag on the Nikkei. Chip-testing
equipment maker Advantest  6857.T  fell 5.49%. 
    Shaes of silicon wafer maker Shin-Etsu Chemical  4063.T 
fell 5.52%. 
    Uniqlo-brand store operator Fast Retailing  9983.T  lost
1.47%.
    "TSMC's earnings beat market expectations, but its outlook
for the industry was dim," said Naoki Fujiwara, senior fund
manager, Shinkin Asset Management.
    Of the 225 components, 209 stocks fell, while 16 rose.
    

 (Reporting by Junko Fujita; Editing by Sherry Jacob-Phillips)
 ((junko.fujita@thomsonreuters.com;))