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Japanese markets witnessed a continued decline on Tuesday as technology stocks endured a second day of heavy selling, triggered by the dramatic overnight plunge in Nvidia’s share price. The US chipmaker saw an unprecedented $589 billion market value erosion on Monday, as markets reacted to perceived threats from Chinese AI start-up DeepSeek.
The tech-heavy Nikkei 225 experienced a decline of up to 1.7 per cent during Tuesday morning trading in Tokyo, ultimately closing 1.4 per cent lower. The broader Topix index, which maintains lower weightings for Japanese tech exporters, remained flat throughout the session.
SoftBank Group emerged as one of the most severely impacted entities, with its Tokyo-listed shares plummeting 5.2 per cent, bringing its total weekly decline to approximately 12 per cent. The company’s vulnerability was particularly heightened due to its 88 per cent stake in Arm Holdings, which suffered a 10 per cent share price drop overnight.
The selling pressure extended beyond major tech firms to include industrial giants such as Mitsubishi Heavy Industries, Hitachi, and Kawasaki Heavy Industries. These companies had previously enjoyed positive trading momentum based on anticipated benefits from increased AI-related infrastructure investment.
In the broader Asian market context, Hong Kong’s Hang Seng benchmark managed to close up 0.2 per cent, bolstered by mainland Chinese tech companies. Notable gainers included Tencent, Alibaba, and Baidu, which recorded increases of 1.4, 1.2, and 3.6 per cent respectively.
The commodities sector also felt the impact, with LME copper, crucial for data centre construction, declining 2 per cent to £9,088 per tonne, whilst nickel experienced a 0.7 per cent reduction to £15,565 per tonne. These movements reflect growing concerns about the sustainability of AI-driven infrastructure expansion plans.
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