Asian markets displayed a divergent trend with Japan's Nikkei 225 rising 2.12% to 66,399.80 while India's Nifty 50 fell 0.61% to a six-week low. The decline in Indian markets followed stronger-than-expected U.S. employment data, which revived expectations of a possible Federal Reserve rate hike in September. Market breadth remained relatively weak with 109 stocks advancing compared to 116 decliners on the Nikkei 225, according to Reuters. Semiconductor stocks led gains amid renewed optimism around artificial intelligence and memory-chip demand, benefiting companies such as Samsung Electronics and SK hynix.
Investor sentiment was supported by signs of resilient demand linked to semiconductors and data centres, with business confidence among Japan's major manufacturers climbing in September to its highest level since December 2021. This improvement was helped by strong demand in semiconductor and data centre sectors, as reported by Reuters. The Philadelphia Semiconductor Index rose 1.3%, providing support for Japan's technology and semiconductor-related shares despite overnight pressure from Iran conflict concerns. Semiconductor stocks led gains in Asian markets, benefiting companies such as Samsung Electronics and SK hynix.
Furukawa Electric emerged as the best-performing Nikkei stock, rising 13.20%, followed by Fujikura which gained 8.75% and Lasertec up 6.56%. Japanese cable makers benefited from renewed optimism around AI infrastructure spending, with Verizon's multi-billion-dollar agreement with Corning to supply high-density optical fibre for AI infrastructure boosting shares of companies such as Fujikura, according to Maki Sawada, an equities strategist at Nomura Securities. GE Vernova T&D India surged 8.77% after securing a high-voltage direct current contract from Power Grid, while Bharat Electronics was the biggest contributor to the Nifty 50, adding 5.09 points.
Micron Technology delivered exceptional Q3 FY2026 results, reporting EPS of $25.11 versus estimated $20.49 on revenue of $41.46 billion versus estimated $35.69 billion, with shares surging 14.6% after-hours to $1,199.52. The company achieved record free cash flow in Q3 with Q4 FCF expected to exceed $30 billion driven by tight supply and strong AI-related data-center demand for memory chips. HBM3E and HBM4 products are fully booked through 2027 with demand extending into 2028, and Micron secured $22 billion in strategic customer agreements including $18 billion cash deposits. The company raised FY2026 capex to approximately $27 billion with FY2027 capex to exceed the mid-$40 billion range as it expands capacity to meet AI infrastructure demand outpacing supply.
Japanese equities faced headwinds from a stronger yen, which remained near a seven-month high amid expectations that the Bank of Japan could accelerate interest-rate hikes as soon as its meeting next week. Analysts at Sony Financial Group said the market appeared to have largely priced in further yen appreciation, suggesting that investors could shift towards buying stocks on declines once the initial selling pressure eases.
