Global stock markets experienced a downturn on Thursday, primarily driven by continued losses in technology shares and escalating tensions between the United States and Iran, which dampened investor sentiment. Oil prices hovered near one-month highs amid growing concerns over stability in the Middle East, further impacting market dynamics.
Despite a positive performance on Wall Street the previous day, markets in Asia and Europe struggled to maintain momentum. South Korea’s Kospi index saw a significant drop, falling over 6%, largely due to a decline in chipmaker SK hynix shares by more than 11%. This slump reflects investor worries that the rally in semiconductor stocks spurred by artificial intelligence advancements may be stalling. There is an increasing skepticism about whether the substantial investments in the AI sector can justify the high valuations of many tech companies, leading to a wider retreat in memory-chip and semiconductor stocks.
Contrary to this trend, Taiwan Semiconductor Manufacturing Company (TSMC) reported record quarterly profits, with net income surging over 77% in the second quarter, buoyed by robust demand for AI hardware. The company also revealed plans to invest an additional $100 billion in manufacturing facilities in Arizona, signaling confidence in the sector’s long-term growth prospects.
Meanwhile, Hong Kong’s stock market defied the general downturn, rising by more than 1% as Chinese semiconductor companies made gains. In the United States, major stock indexes closed higher on Wednesday, bolstered by strong performances from leading technology firms. Investor confidence was notably boosted by a 0.3% drop in US producer prices in June, attributed to lower energy costs, which raised hopes that the Federal Reserve might refrain from increasing interest rates in the near future. Nonetheless, analysts cautioned that the intensifying conflict 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 the announcement of its acquisition by ride-hailing giant Uber. The deal, valued at €12.7 billion ($14.6 billion), represents a significant consolidation in the delivery and transport sectors.