Global stock markets saw a notable downturn on Thursday as technology stocks continued their downward trend, compounded by rising tensions between the United States and Iran which affected investor sentiment. Despite the market fluctuations, oil prices remained close to their one-month highs due to ongoing concerns about stability in the Middle East.
In Asia, the South Korean Kospi index experienced a significant drop of over 6%, with SK hynix, a prominent chipmaker, seeing its shares fall more than 11%. This decline was driven by investor fears that the surge in semiconductor stocks, fueled by artificial intelligence advancements, might be losing steam. The broader apprehension about whether the substantial investments in the AI sector are justified by the high valuations of tech companies has led to a retreat in memory-chip and semiconductor stocks.
Amidst the sell-off, Taiwan Semiconductor Manufacturing Company (TSMC) stood out by announcing a record profit for the second quarter, with net income rising over 77% due to strong demand for AI hardware. TSMC also revealed plans to invest an additional $100 billion in its manufacturing facilities in Arizona, underscoring its commitment to expanding its production capabilities.
In contrast to the general trend, Hong Kong’s stock market registered a rise of over 1%, driven by gains in Chinese semiconductor stocks. Meanwhile, in the United States, major stock indexes closed higher on Wednesday, buoyed by gains in leading technology firms. This uptick in investor confidence was supported by a 0.3% drop in US producer prices in June, attributed to lower energy costs and prospects that the Federal Reserve might refrain from raising interest rates in the near future. However, analysts cautioned that the escalating conflict between Washington and Tehran could introduce further market volatility.
On the corporate front, the food-delivery company Delivery Hero from Germany agreed to be acquired by Uber, the ride-hailing giant, in a transaction valued at €12.7 billion ($14.6 billion). This announcement led to an increase in Delivery Hero’s shares during trading in Frankfurt.
