On Thursday, global stock markets mostly took a downward turn, with technology shares continuing their decline. This came amidst renewed tensions between Iran and the United States, which contributed to dampened investor sentiment. At the same time, oil prices remained close to their highest levels in a month, fueled by ongoing concerns about stability in the Middle East.
The gains seen in the U.S. stock market earlier in the week failed to carry over to Asian and European markets. Notably, South Korea’s Kospi index saw a significant drop of over 6%. This was driven by a sharp 11% fall in SK hynix shares, as investors worried that the surge in semiconductor stocks, driven by artificial intelligence enthusiasm, might be losing steam. Such apprehensions have led to broader declines in memory-chip and semiconductor stocks, with investors questioning the sustainability of high valuations in the tech sector given the massive investments it has attracted.
Despite the downturn, Taiwan Semiconductor Manufacturing Company (TSMC) reported a record-breaking quarterly profit, with net income soaring over 77% in the second quarter, spurred by high demand for AI hardware. In light of this, TSMC unveiled plans to invest a further $100 billion in its manufacturing operations in Arizona, underscoring its commitment to expanding its production capabilities.
Contrary to the general market trend, Hong Kong’s stock market rose by more than 1%, driven by advancements in Chinese semiconductor companies. Meanwhile, in the United States, major indexes closed higher on Wednesday, buoyed by rising shares of technology giants. This uptick in investor confidence was partly due to a 0.3% decline in U.S. producer prices in June, which was aided by lower energy costs and the belief that the Federal Reserve might hold off on raising interest rates in the near term. Nevertheless, analysts cautioned that the intensifying conflict between Washington and Tehran could lead to increased market volatility.
In corporate developments, German food-delivery service Delivery Hero announced its agreement to be acquired by ride-hailing behemoth Uber. This takeover deal, valued at €12.7 billion ($14.6 billion), led to an increase in Delivery Hero’s share price during trading in Frankfurt.