[11/11 Stock Market Review] Reversal of the Overshot Pendulum, AI Stock Revival, and the Effects of Structural Reform Seen in Resonac

Introduction: Three Consecutive Days of Gains Completely Erase the Sharp Drop

In today’s Tokyo stock market, the Nikkei Stock Average rose significantly for the third consecutive business day, closing at 61,248.59 yen, up 789.01 yen from the previous day. On a closing basis, it recovered the 61,000 yen level for the first time in three business days since the 5th. The gap opened by the sharp drop on November 6th (a decline of over 3,600 yen) was completely filled in just three days, with gains of 1,340 yen on Monday, 1,684 yen on Tuesday, and 789 yen today, totaling approximately 3,800 yen.

[Today’s Stock Market Data]
・Nikkei Average: 61,248.59 +789.01 (+1.31%)
・TOPIX: 3,929.39 +35.68 (+0.92%)
・NT Ratio: 15.59 +0.06 (+0.4%)
・TSE Prime Market Movement: Advancers 836 / Decliners 668 / Unchanged 47

The market, which at one point recorded a “margin trading valuation loss ratio of -21%,” a level of deterioration rarely seen in recent years, raised concerns about forced liquidations related to margin calls and psychological panic, but the overshot pendulum was coldly pulled back to the center. In this article, we will unravel the supply-demand structure behind this rapid recovery and the notable individual materials (CoreWeave, Anthropic, Resonac).

1. Catalyst from the US: CoreWeave’s Strong Earnings and Anthropic IPO

The biggest trigger for this improvement in market sentiment was the strong earnings report from US-based CoreWeave announced after the close of the US market the previous day. By demonstrating results that exceeded market expectations, the “excessive concern and credit anxiety regarding massive AI investment” that had been covering the market in the short term was somewhat alleviated.

In the US market, the Consumer Price Index (CPI) exceeded expectations, and major stock indices fell due to the burden of speculation about additional US interest rate hikes and rising interest rates; however, in the Tokyo market, buying interest in semiconductor and AI-related stocks (Advantest, Tokyo Electron, Ibiden, etc.) became dominant.

Furthermore, developments surrounding US-based Anthropic, which is scheduled to list on the 19th of this month, also acted as a tailwind. With the tentative price range ($70-$78 per share) and valuation ($1.26 trillion to $1.4 trillion scale) indicated, concerns about a postponement of the listing were dispelled. In addition, reports emerged that the lead underwriting bank group was considering raising the valuation, which served to draw investor attention back to the AI-related sector.

2. The Mechanics of Supply and Demand: Short Covering Surprised by the Sound of Waterfowl and Kioxia’s Trends

The protagonist of this rapid rebound lies not so much in a dramatic improvement in investor sentiment as in the supply-demand balance beneath the surface.

During the sharp decline leading up to the end of last week, the clearing of margin buying balances progressed. For example, at Kioxia Holdings (285A), which attracts intense attention from individual investors, the margin buying balance, which exceeded 900 billion yen at its peak, has dropped sharply to 710 billion yen (based on unit price; in reality, it is under 500 billion yen). The margin ratio for the number of shares has also fallen to 18.98 times, indicating that a significant amount of stagnant positions has been digested.

On the other hand, the circumstances of the sellers (short sellers) cannot be overlooked. In a market that fell by more than 7,000 yen over the last five business days, short sellers who had been squeezed were strongly inclined to rush to lock in profits, and they accelerated the timing of their buybacks from the beginning of the week. As mentioned in the commentary by Daiwa Securities, it can be said that the so-called “short covering like the Heike clan surprised by the sound of waterfowl” created the unexpectedly strong rebound.

3. Resonac’s 3Q Earnings: Structural Reform to Drain the Pus from Graphite Electrodes

The third-quarter earnings for the fiscal year ending December 2026 for the notable Resonac Holdings (4004) were announced after the market close.

• Overview of Figures: Consolidated final profit for the January-September period expanded rapidly to 94.6 billion yen, 16 times higher than the same period last year. However, regarding the full-year forecast, it was revised downward by 33.3% from the previous 112.5 billion yen to 75 billion yen.

• Reason for Downward Revision: The main reason is the inclusion of 99.0 billion yen in losses related to the graphite electrode business as an extraordinary loss. The company embarked on drastic structural reforms, including the sale and withdrawal of businesses it had held for many years, effectively spitting out a huge amount of “pus” all at once at this timing.

• Shining Strength of the Core Business: The semiconductor and electronic materials field is in excellent shape against the backdrop of demand for AI, and the full-year core operating profit forecast was revised upward from the previous 196 billion yen to 250 billion yen (2.39 times the previous year).

In response to this announcement, the stock showed a rising reaction in PTS (night trading), and it appears that the market is positively evaluating the “exhaustion of bad news” and the “strengthening of core business profitability.”

Future Outlook and Investment Strategy

The Nikkei Stock Average has broken above the Ichimoku Kinko Hyo conversion line (60,788 yen), and some bullish views are beginning to emerge, suggesting that a return to the 200-day moving average level (62,056 yen) can be expected.

Tomorrow, the 13th, will finally mark the peak of domestic corporate earnings announcements. Although macro headwinds such as speculation regarding additional interest rate hikes in the U.S. and rising long-term interest rates remain, excessive pessimism is receding. It can be said that this is a phase to flexibly build positions for the year-end market, while focusing on individual stock selection based on a close examination of earnings results.

[Important Note] This article is intended for the purpose of recording my own investment activities and corporate analysis, and does not recommend the buying or selling of any specific stocks. Investment always carries the risk of price fluctuations.
Please ensure that you make final investment decisions and stock selections based on your own analysis and responsibility.