Japan’s Nikkei share average slumped to a three-week low on Monday as chip-sector stocks tumbled, taking cues from a technology-led sell-off on Wall Street on Friday.
The Nikkei 
NI225 dropped more than 2% to 41,849.82, as of the midday trading recess, and earlier dipped to 41,843.96 for the first time since August 8.
More than half of the Nikkei’s 869-index point slide was accounted for by drops in two heavyweight stocks: chip-testing equipment maker and Nvidia supplier Advantest 
6857 plunged 9.1%, or 280 points, while artificial intelligence-focused start-up investor SoftBank Group 
9984 dropped 6.3%, or 202 points.
The broader Topix 
TOPIX, by contrast, declined a more muted 0.8%.
“This seems to me like an exaggerated reaction to Friday’s New York market, which was basically a rebalancing of portfolios at month-end by selling all the stocks that outperformed in August”, primarily the big tech names, said Yunosuke Ikeda, head of macro research at Nomura.
Wall Street’s AI darling, Nvidia 
NVDA, slipped 3.3% on Friday, declining for a second day after earnings following Wednesday’s closing bell disappointed the market’s lofty expectations.
Nvidia shares were also weighed down by a Wall Street Journal report that China’s Alibaba 
BABA, BABA had developed a new chip to compete with Nvidia’s offerings. Alibaba surged as much as 18.8% on Monday in Hong Kong.
On Friday, the Philadelphia SE Semiconductor Index 
SOX dropped more than 3%.
The U.S. markets are closed on Monday for the Labor Day holiday.
Other chip shares leading the Nikkei lower in the latest session included Disco 
6146, off 8.5%, Socionext 
6526, down 7.1%, and Furukawa Electric 
5801, down 6.7%.
With Advantest and SoftBank Group, those stocks made up the bottom five performers on the Nikkei.
Of the Nikkei’s 225 components, 128 fell, 95 rose, while two were trading flat.
AloJapan.com