Global stock markets witnessed a general downturn on Thursday, driven by a continued slump in technology shares and heightened tensions between the United States and Iran, which dampened investor sentiment. In contrast, oil prices maintained their position near one-month highs, fueled by concerns over the stability in the Middle East.
Despite a positive run on Wall Street the previous day, Asian and European markets struggled to maintain momentum. South Korea’s Kospi index experienced a significant drop of over 6%, with SK hynix, a key player in the chipmaking industry, plummeting by more than 11%. This decline stemmed from investor apprehensions that the AI-inspired surge in semiconductor stocks might be losing its vigor. The market’s growing skepticism about whether the substantial investments in AI can support the lofty valuations of many tech companies has prompted a broader retreat in memory-chip and semiconductor stocks.
Amid the sell-off, Taiwan Semiconductor Manufacturing Company (TSMC) defied the trend by reporting a record quarterly profit, as its net income soared by over 77% in the second quarter, bolstered by robust demand for AI hardware. Further underlining its growth trajectory, TSMC unveiled plans to inject an additional $100 billion into its manufacturing facilities in Arizona.
In a departure from the prevailing market trends, Hong Kong’s stock market climbed by more than 1%, aided by gains in Chinese semiconductor firms. Meanwhile, major U.S. indexes closed higher on Wednesday, propelled by advances in technology giants. The positive sentiment was partly attributed to a 0.3% decline in U.S. producer prices in June, driven by reduced energy costs and the anticipation that the Federal Reserve might refrain from immediate interest rate hikes. Nonetheless, analysts cautioned that rising hostilities between Washington and Tehran could heighten market volatility.
In corporate developments, German food-delivery company Delivery Hero saw its shares rise in Frankfurt trading following news of its agreement to be acquired by ride-hailing giant Uber in a deal worth €12.7 billion ($14.6 billion).