(MENAFN) The Japanese Nikkei index experienced a reversal of its early gains on Thursday, ending the trading session with a decline primarily attributed to a downturn in shares of companies within the chip industry. Notably, Tokyo Electron shares took a hit following the announcement of annual revenue estimates for British chip design company, Arm Holdings, which fell below market expectations. This setback prompted a wave of selling across chip-related stocks, contributing to the overall decline in the Nikkei index.
The Nikkei index closed with a decrease of 0.34 percent, settling at 38,073.98 points after initially rising by 0.5 percent earlier in the session. Shuji Hosui, chief strategist at Daiwa Securities, noted that the declines in Arm Holdings had a ripple effect, triggering broad selling in Tokyo Electron and other companies involved in the chip industry.
Arm Holdings' announcement of lower-than-expected full-year revenue estimates had immediate repercussions, with its Frankfurt-listed stock witnessing a decline of approximately ten percent on Thursday. This development had a notable impact on Tokyo Electron, a prominent Japanese manufacturer of chip-making equipment, which saw its shares drop by around three percent, significantly influencing the performance of the Nikkei index.
Furthermore, SoftBank Group, a major technology investor holding about 90 percent ownership of ARM Holdings, also experienced a decline of approximately three percent in its shares. The broader Topix index, however, managed to close 0.26 percent higher at 2,713.46 points, indicating a mixed performance across the Japanese stock market.
Among the more than 1,600 companies listed on the main market of the Tokyo Stock Exchange, 1,081 stocks witnessed gains while 519 stocks recorded declines, reflecting the varied response of individual companies to the market dynamics observed during the trading session.
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