Global stock markets experienced declines on Thursday, driven by a continued sell-off in technology shares and rising tensions between the United States and Iran affecting investor sentiment. Oil prices hovered near their highest levels in a month amid increasing concerns over stability in the Middle East.
Following gains on Wall Street the previous day, markets in Asia and Europe struggled to maintain momentum. South Korea’s Kospi index dropped more than 6%, primarily impacted by a significant 11% fall in chipmaker SK hynix shares. Investors are growing increasingly wary of whether the substantial investments in the artificial intelligence sector can sustain the high valuations of technology companies, leading to a broader retreat in memory-chip and semiconductor stocks.
Despite this downturn, Taiwan Semiconductor Manufacturing Company (TSMC) reported a record profit for the second quarter, with net income rising over 77%, fueled by robust demand for AI hardware. TSMC also announced plans to invest an additional $100 billion in expanding its manufacturing facilities in Arizona, signaling confidence in future growth.
Contrary to the general trend, Hong Kong’s stock market saw gains, climbing over 1% as Chinese semiconductor firms advanced. In the U.S., major indices closed higher on Wednesday, buoyed by strong performances from technology giants. Investor confidence was further supported by a 0.3% drop in June’s U.S. producer prices, attributed to lower energy costs, fostering hopes that the Federal Reserve might refrain from raising interest rates in the near future. Nonetheless, analysts caution that escalating tensions between Washington and Tehran could heighten market volatility.
In corporate developments, German food-delivery company Delivery Hero agreed to a €12.7 billion ($14.6 billion) takeover by ride-hailing giant Uber. This news led to a rise in Delivery Hero’s shares during Frankfurt trading.