Global Market: Japan's Nikkei falls for third straight session as chip stocks slide

The benchmark Nikkei 225 was down 0.43% at 62,425.47 in morning trade, putting it on track for its lowest close since July 30. The broader Topix index, however, rose 0.48% to 3,984.74.

US stock indexes ended lower on Friday, although the S&P 500 energy sector gained 2.5% to reach a record high. Oil prices retreated from a six-month high on Monday after reports that Qatari mediators had visited Tehran to seek de-escalation in coordination with the United States. The diplomatic efforts followed intensified Houthi attacks on Saudi Arabia that had raised concerns over global oil supplies, Reuters reported.

According to Reuters, the Nikkei declined despite broadly positive market breadth, with 166 stocks advancing and 59 declining. The index's heavy exposure to technology shares weighed on the overall gauge as investors remained cautious about chip-related stocks.

Sumco was the biggest percentage loser on the Nikkei, falling 4.03% and heading for its lowest close since April 2026. Kokusai Electric dropped 3.86%, while Screen Holdings declined 3.78%.

Energy and trading-related stocks led the gainers. Inpex rose 4.92%, followed by JGC Holdings, which advanced 4.56%, and Mitsubishi Corp, which gained 4.28%.

Monex Securities senior analyst Satoshi Saito said the Nikkei showed signs of short-term technical undervaluation, suggesting a possible near-term rebound. However, persistent uncertainties could limit the strength of any recovery, he said in a note, Reuters reported.

Investors are weighing the prospect of a technical recovery against concerns over global market volatility, technology-sector weakness and developments in the Middle East that could influence oil prices and broader risk sentiment.