The Japanese stock market has taken a hit, with the Nikkei share average falling to a three-week low. This downturn is largely attributed to the poor performance of heavyweight tech stocks, which are facing concerns over the outlook for artificial intelligence and data centre businesses.
The Nikkei fell 1.03% to 49,001.5, its lowest close since November 25. The broader Topix slipped 0.37% to 3,356.89. This decline is not isolated to Japan, as Wall Street's main indexes also closed lower, with the S&P 500 and the tech-heavy Nasdaq sinking to three-week lows.
The market's concerns about the profitability of AI-related businesses and data centres in the U.S. have been coming to the surface. Japan is not an exception, with many data centres being constructed in the country. SoftBank Group fell 3.76% after Oracle dropped 5.4% following a report that said the cloud company's largest data centre partner Blue Owl Capital will not back a $10 billion deal for its next facility.
Despite the overall decline, some stocks bucked the trend. Shift, a software testing firm, jumped 5.09% to become the Nikkei's top-percentage gainer. Keisei Electric Railway rose 4.57%.
Remember, this is a market perspective, not a prediction. It's essential to do your own research and consider multiple factors before making any investment decisions.
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