Nikkei Average extends decline as high-priced stocks weigh on market / Lunchtime comment (Fisco)

The Nikkei Average extended its decline in the morning session, ending down ¥512.73 at ¥63,498.61. Trading volume was estimated at 975.34 million shares, with selling focused on high-priced stocks against the backdrop of trends in U.S. markets. Despite gains in U.S. stocks on Friday, the Nikkei opened lower and remained weighed down by concerns over a slowdown in AI development and movements in crude oil prices.

In the U.S. market, the Dow closed higher, but expectations for an early rate hike strengthened after CPI was seen as evidence of accelerating inflation. At the same time, a pullback in crude oil prices provided some reassurance to the market. Although the Nikkei showed resilience toward the latter half of the morning session, selling pressure remained, and gains in the afternoon session were expected to be limited.

Among individual stocks, Recruit Holdings, Fast Retailing, Konami Group, Bandai Namco Holdings and Sony Group advanced. SoftBank Group, Advantest, Kioxia Holdings, Ibiden, Tokyo Electron, Fujikura, Murata Manufacturing, Taiyo Yuden and Sumitomo Electric declined. By sector, services, insurance and other products rose, while information and communications, nonferrous metals and metal products declined. The afternoon session was expected to see range-bound trading around the morning closing level, with concerns over a slowdown in AI development and higher crude oil futures prices continuing to weigh on the market.

The Nikkei Average was said to have the potential to move close to its 26-week moving average again in the afternoon, while the prevailing view was that buying would remain limited overall amid a lack of fresh catalysts. Some observers said that a wait-and-see mood could strengthen ahead of central bank events. From an ethical standpoint, specific investment decisions should not be indicated, and the focus is expected to remain on observing share-price movements themselves.