Japan's stock market: Early trading fell over 2% to a three-week low, with technology stocks plummeting

Reuters Tokyo, September 1 - The Nikkei index in the Japanese stock market fell to a three-week low on Monday, with chip stocks plummeting significantly, influenced by the sell-off of technology stocks in the U.S. market last Friday. As of the early closing, the Nikkei index (.N225) dropped more than 2% to 41,849.82 points, having previously fallen to 41,843.96 points, marking the first time since August 8. Of the 869-point decline in the Nikkei index, more than half was caused by the drop of two heavyweight stocks: chip testing equipment manufacturer and Nvidia supplier Advantest (6857.T) fell 9.1% or 280 points, while SoftBank Group (9984.T), an investor focused on artificial intelligence startups, dropped 6.3% or 202 points. In contrast, the Tokyo Stock Price Index (.TOPX) saw a smaller decline of 0.8%. "In my view, this seems to be an exaggerated reaction to the U.S. market last Friday, where the U.S. stock market essentially rebalanced portfolios by selling off all the stocks that performed well in August," said Yunosuke Ikeda, head of macro research at Nomura Securities, primarily referring to large tech stocks. Wall Street's AI darling Nvidia (NVDA.O) fell 3.3% on Friday, marking its second consecutive day of decline after disappointing earnings results released after Wednesday's close. A report from The Wall Street Journal also weighed on Nvidia's stock price, stating that China's Alibaba (9988.HK) (BABA.N) has developed a new chip that competes with Nvidia's products. Alibaba surged 18.8% in the Hong Kong market on Monday. On Friday, the Philadelphia Semiconductor Index (.SOX) fell more than 3%. The U.S. market was closed on Monday for the Labor Day holiday. Other chip stocks that led the decline in the Nikkei index on the most recent trading day included: Disco (6146.T) down 8.5%; Socionext (6526.T) down 7.1%; and Furukawa Electric (5801.T) down 6.7%. Along with Advantest and SoftBank Group, these stocks made up the five worst performers in the Nikkei index. Among the 225 constituent stocks of the Nikkei index, 128 fell, 95 rose, and 2 remained unchanged