The Nikkei Average continued its sharp decline this week, while caution over AI regulation sent technology stocks tumbling across the board. The outcome of the US midterm elections and developments related to AI were the market's key focus.
The Nikkei Average fell sharply from the previous weekend in Tokyo trading this week, at one point dropping below the ¥60,000 mark. Selling spread through technology stocks following the US midterm election results, while the TOPIX and the Growth Market Index also fell significantly.
Risk-off sentiment intensified toward the end of the week, and concerns over tighter AI regulation prompted selling in leading stocks. The Nikkei Average at one point posted a sharp decline, and on one day recorded its third-largest fall ever on a closing-price basis. Funds also flowed into value stocks such as automobiles and real estate at times.
By sector, non-ferrous metal and resource stocks, as well as financial stocks, saw particularly notable declines, while export-oriented machinery and electrical stocks were also sold. Air transport stocks such as ANA Holdings Inc. showed strength at times, while some domestic-demand-related stocks also rebounded.
Earnings announcements will enter full swing next week, and dip-buying is expected to focus on companies reporting strong results. Attention will also be needed on events including domestic and overseas economic indicators and SQ.