Japan's Nikkei jumps as tech results revive AI optimism

Tokyo witnessed a significant boost in Japan's Nikkei share gauge on Wednesday, as technology firms' results reignited optimism in the AI sector. The benchmark Nikkei 225 surged 1.26% to 64,067.10 at midday, while the broader Topix dipped slightly by 0.02% to 3,996.53. The U.S. tech-heavy S&P 500 and Nasdaq index both rose, with the Nasdaq gaining 1.18%.

Meta Platforms experienced a decline overnight following its decision to increase its equity fundraising to $97.5 billion to fuel AI expansion. Nvidia and AMD had committed to the offering.

A pattern emerged among AI-related companies, with shares typically falling after announcements of substantial spending and fundraising, while positive profitability news led to stock price increases. Maki Sawada, an equities strategist at Nomura Securities, noted this trend, stating that investors are expected to react strongly to earnings announcements from key semiconductor-related stocks as the weekend approaches.

Looking ahead, investors kept an eye on the Federal Reserve's rate decision, which was scheduled for later in the day. The market anticipated a hold, with a high probability of a December rate hike. On the Nikkei 225, 86 stocks advanced compared to 138 that declined. Kioxia Holdings led the gains, jumping 12.97%, followed by Taiyo Yuden with an 8.41% increase and Ibiden rising 7.00%.

Conversely, Capcom saw the largest drop, falling 11.80%, with Konami Group and Canon also experiencing declines of 6.76% and 5.83%, respectively.