Stock markets across the globe experienced a downturn on Thursday, primarily driven by a continued slump in technology shares and rising tensions between the United States and Iran that dampened investor sentiment. Oil prices lingered near month-long highs, reflecting persistent concerns over the stability of the Middle East region.
Despite the previous day’s positive performance on Wall Street, Asian and European markets struggled to maintain momentum. South Korea’s Kospi index saw a significant drop of over 6%, heavily impacted by a decline in semiconductor stocks, notably with chipmaker SK hynix plummeting more than 11%. This drop was fueled by investor apprehension that the surge in semiconductor stocks, spurred by advances in artificial intelligence, may be losing steam. The high valuations of many technology companies are increasingly under scrutiny, sparking a wider retreat in memory-chip and semiconductor stocks.
Amidst the sell-off, Taiwan Semiconductor Manufacturing Company (TSMC) stood out with a record quarterly profit, reporting a net income increase of over 77% in the second quarter due to robust demand for AI hardware. In a further commitment to its growth, TSMC unveiled plans to invest an additional $100 billion in its manufacturing facilities in Arizona. Meanwhile, Hong Kong’s stock market defied the overall trend, climbing by more than 1%, buoyed by gains in Chinese semiconductor firms.
In the United States, major indexes ended higher on Wednesday, bolstered by advances in technology giants. Market confidence received a boost as US producer prices fell by 0.3% in June, aided by reduced energy costs and expectations that the Federal Reserve might refrain from raising interest rates in the near future. Nonetheless, analysts cautioned that increasing hostilities between Washington and Tehran could lead to greater market volatility.
In corporate developments, German food-delivery company Delivery Hero saw its shares rise in Frankfurt trading following the announcement of a takeover agreement by ride-hailing giant Uber. The deal is valued at €12.7 billion ($14.6 billion), highlighting continued consolidation within the tech-driven service industry.