Global stock markets faced a downturn on Thursday as technology shares continued their slump and tensions between the United States and Iran impacted investor confidence. Despite these pressures, oil prices hovered around one-month highs due to ongoing concerns about Middle Eastern stability.
In Asia, markets couldn’t maintain the upward momentum from Wall Street’s previous performance. South Korea’s Kospi index suffered a sharp decline of over 6%, driven by a significant drop of more than 11% in SK hynix shares. This fall reflected growing investor skepticism regarding the sustainability of the AI-driven surge in semiconductor stocks, with many questioning if the substantial investments in the AI sector truly justify the high valuations of tech companies. This skepticism has led to a broader retreat in the memory-chip and semiconductor market.
Amid the broader market downturn, Taiwanese semiconductor leader TSMC reported exceptional financial results, posting a record quarterly profit. The company’s net income soared by over 77% in the second quarter, bolstered by robust demand for AI hardware. TSMC further announced an ambitious plan to invest an additional $100 billion in expanding its manufacturing capabilities in Arizona.
Contrary to the general trend, Hong Kong’s stock market experienced gains, climbing over 1% as Chinese semiconductor companies saw advancement. Meanwhile, in the United States, major indexes ended Wednesday on a high note, primarily supported by an uptick in technology stocks. This boost in investor sentiment was attributed to a 0.3% drop in US producer prices in June, spurred by decreased energy costs and the possibility that the Federal Reserve might hold off on interest rate hikes in the near future. Nonetheless, analysts cautioned that rising tensions between Washington and Tehran could lead to increased market volatility.
In corporate developments, a notable transaction saw German food-delivery service Delivery Hero agreeing to be acquired by ride-hailing giant Uber. The deal, valued at €12.7 billion ($14.6 billion), resulted in an increase in Delivery Hero’s share price during Frankfurt trading, marking a significant moment in the corporate landscape.