Japan's Nikkei falls as chip-related shares decline on caution ahead of Nvidia earnings

Tokyo's Nikkei share average experienced a decline on Tuesday, as chip-related stocks mirrored the downward trend of their US counterparts on account of caution surrounding Nvidia's upcoming earnings. The Nikkei finished 0.5% lower at 65,197.7 as of 01:46 GMT, while the broader Topix saw a modest 0.06% increase to 4,075.83. Market analyst Shuutarou Yasuda noted that "the market is cautious ahead of Nvidia earnings due on Wednesday," but also pointed out that value stocks, such as shipping companies, tend to perform well during periods of Middle East tensions.

In fact, the shipping sector outperformed, rising 2.91% to become the top gainer among the 33 industry sub-indexes on the Tokyo Stock Exchange. The S&P 500 and Nasdaq, however, closed lower on Monday due to technology stocks' underperformance, with investors keeping a close eye on the Middle East tensions and preparing for a week that includes a crucial inflation report.

Nvidia, a leading chipmaker, saw its shares fall for the seventh consecutive day, further adding to the market's cautious sentiment. In Japan, chip-testing equipment maker Advantest and chip-making equipment maker Tokyo Electron also saw declines, with their stocks falling by 3.33% and 1.03%, respectively. Additionally, Kioxia, a memory chipmaker, suffered a 1.37% drop.

The decline in shares of Samsung Electronics, following the disappointment over its $79 billion shareholder-return plan, also impacted Japanese chip-related stocks. In contrast, fibre optic cable manufacturers like Fujikura and Furukawa Electric saw gains, with their stocks rising by 4.15% and 6%, respectively. Out of more than 1,500 stocks traded on the TSE's prime market, 53% managed to rise, 43% fell, and 3% remained unchanged.