Nikkei 225 rebounds as AI and semiconductor stocks recover

The Nikkei 225 index experienced a significant rebound on Monday, rising by 1,340.50 points or 2.33 percent to close at 58,775.50. This recovery follows a period of intense volatility triggered by the U.S. midterm elections, which had previously raised concerns regarding potential Democratic-led regulations on artificial intelligence and data centers.

The rally was primarily driven by a resurgence in technology and semiconductor-related stocks, mirroring a broader recovery in Wall Street markets. Investors engaged in buying activities for undervalued stocks after the index entered a bear market following a nearly 6 percent drop on November 6.

While the rebound shows renewed confidence in the AI sector, market analysts advise caution. They note that the upward movement may be a technical correction following the recent historic sell-off rather than a definitive end to the uncertainty surrounding AI investment and regulatory landscapes.