The Nikkei 225 temporarily plunged more than ¥4,000, led by AI-related stocks. Following the results of the US midterm elections, concern that regulations on data center construction could be tightened affected market sentiment.
The Nikkei 225 fell sharply from the previous day, declining substantially in morning trading. Specifically, the index was down more than ¥4,000 at one point, with its intraday level fluctuating significantly. Market participants expressed surprise, and the scale of the plunge drew attention. In contrast with the previous rise in AI-related stocks, the decline spread across the market.
The morning closing level was ¥57,858, ¥3,219 below the previous day. Securities firms in Tokyo saw inquiries flood in from the morning, suggesting that trading activity had intensified. Speculation also emerged that the plunge reflected a correction of the market's short-term overheating.
The results of the US midterm elections have been cited as a factor behind the plunge. Reports said that concern had grown that a Democratic landslide could increase the likelihood of tighter regulations on data center construction and other areas. It has also been suggested that selling of AI-related stocks spread in overseas markets as a result.
While some view AI-related stocks as having driven the market to date, others believe the latest move could prompt a correction in excessive valuations. Market participants have pointed out that the valuation of AI-related companies could change depending on developments from here.