Japan's Nikkei tumbles as chip-related stocks, Middle East tensions weigh

Shin-Etsu Chemical

19/04/2024 07:52

(Updates at 0600 GMT)
       TOKYO, April 19 (Reuters) - Japan's Nikkei share average
posted its worst day in more than two and half years on Friday
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 2.66% to close at 37,068.35 in its
sharpest daily fall since September 2022, with 206 out of 225
stocks declining.
        The index fell to as low as 36,733.06 earlier in the
session, its lowest since Feb. 8. For the week, it lost 6.2% in
its biggest fall since June 2022.
    "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.
        Israel launched an attack on Iranian soil on Friday,
sources told Reuters, in the latest tit-for-tat exchange between
the two countries, stoking caution among investors.
    Taipei-listed shares of TSMC  2330.TW  fell nearly 7%
following the company's first-quarter earnings report in which
it dialled back its expectations for chip sector growth and did
not revise up its capital spending plans.
    Chip-making equipment maker Tokyo Electron  8035.T  tanked
8.74% and was the biggest drag on the Nikkei. Chip-testing
equipment maker Advantest  6857.T  lost 4.38%.
    "TSMC's earnings beat market expectations, but its outlook
for the industry was dim," said Naoki Fujiwara, senior fund
manager, Shinkin Asset Management.
    All but three of the Tokyo Stock Exchange's industry
sub-indexes fell. Energy explorer  .IMING.T  rose 1.07% as oil
prices jumped. Shipping firms  .ISHIP.T  rose 0.98%.
        The broader Topix  .TOPX  closed 1.91% lower at
2,626.32, recovering some earlier losses.

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