Japan's Nikkei rises for third straight session as AI optimism returns; SoftBank falls 3%

Japan's Nikkei share average advanced for a third consecutive session on Wednesday, supported by improving sentiment towards artificial intelligence stocks after fresh economic data and corporate earnings reports helped ease concerns over the sector's growth outlook, Reuters reported.

The benchmark Nikkei 225 rose 0.80% to 60,942.48 at the midday break, while the broader Topix index gained 0.79% to 3,924.51.

Read more: Global Market Today: Asian stocks rise on CoreWeave results, bonds drop


Japanese equities drew support from improving business confidence, with manufacturers' sentiment reaching its strongest level in more than five years in November, according to a Reuters poll published on Wednesday. Strong demand for semiconductors helped underpin optimism across the manufacturing sector.

The recovery in AI-related stocks also provided support to market sentiment. Although US equities closed lower overnight after stronger-than-expected inflation data fuelled expectations of a possible Federal Reserve interest rate hike, developments in the technology sector offered some relief to investors.

Read more: US stocks: Five things to know about Anthropic

AI cloud computing company CoreWeave said after the US market close that it expected to become profitable on an adjusted basis in the first half of 2028. Meanwhile, a Wall Street Journal report said OpenAI, the company behind ChatGPT, recorded a roughly 50% increase in quarterly revenue to $10 billion, despite continuing to report substantial operating losses.

Global AI-related stocks had come under heavy selling pressure last week amid concerns that the US Congress could slow investment in the sector following the Democrats' sweeping victory in the midterm elections.

Investors are now turning their attention to third-quarter results from chipmaker Nvidia, due next week, for further indications of the strength of AI-related demand.

Nomura Securities equity strategist Wataru Akiyama said strong results from Nvidia could help ease concerns surrounding earnings prospects for AI and semiconductor companies. Such a development could also support a recovery in major Japanese companies exposed to the artificial intelligence theme, he added.

However, losses in SoftBank Group weighed on sentiment. The Japanese technology investment giant, one of the country's biggest investors in artificial intelligence, reported a second-quarter net loss of 1.1 trillion yen ($6.93 billion) after the market closed on Tuesday. Its shares fell 3.02% on Wednesday.

Market breadth remained positive, with 149 stocks advancing on the Nikkei 225, compared with 75 decliners.

Refrigerated logistics company Nichirei led the gainers, rising 8.18% and heading for its biggest single-day advance since November 2022. Kokusai Electric and Taiyo Yuden followed, with both stocks gaining around 7.5%.

On the losing side, Mitsui Kinzoku fell 7.28%, while DeNA declined 6.90%. Tokyu dropped 5.63%, putting it on course for its steepest one-day decline since August 2024.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)