chip sell-off – World stocks were mixed Thursday, but Japan and South Korea slid sharply in a new wave of selling tied to computer-chip shares. Oil prices fell after U.S. and Iranian negotiators met separately with Qatar and Pakistan mediators, while chip concerns and worries
World markets were mixed Thursday, but the mood in Asia turned unmistakably ugly when chip shares sold off again.
South Korea’s Kospi sank 7.9% to 7,648.09 as chip-related shares dragged lower. Memory chipmaker SK Hynix fell 14.6%, and Samsung Electronics tumbled 9.1%. Tokyo’s Nikkei 225 dropped 2.5% to 68,733.15, with Tokyo Electron, a chip equipment maker, sliding 7.4%. Taiwan’s Taiex declined 0.6%, as TSMC, or Taiwan Semiconductor Manufacturing Co., fell 1.6%.
That pressure rippled through trading elsewhere too. In early European trading, Britain’s FTSE 100 rose 0.5% to 10,530.26, France’s CAC 40 advanced 0.7% to 8,393.60, and Germany’s DAX climbed 0.5% to 25,160.50.
After months of AI-fueled momentum, the shift felt abrupt. Surging demand for artificial intelligence has pushed many AI and tech stocks higher in recent months. with markets in South Korea. Japan and Taiwan reaping big gains. So far this year, the Kospi and Nikkei 225 have gained about 77% and 33%, respectively.
But heavy selling in chips pointed to a growing fear that the market is overextending. Concerns over a potential glut in supply have clouded investor sentiment, tied to massive investments made by Big Tech companies in the U.S. and elsewhere.
In the U.S. on Wednesday, chip stocks mostly fell. Micron Technology fell 10.6%, Intel sank 9%, AMD, or Advanced Micro Devices, dropped 6.9%, Broadcom lost 2.2%, and Nvidia slipped 1.3%. The S&P 500. Wall Street’s benchmark. fell 0.2% to 7. 483.23. the Dow Jones Industrial Average slipped less than 0.1% to 52. 305.24. and the technology-heavy Nasdaq composite dropped 0.7% to 26. 040.03.
Economists Megan Fisher and Vicky Redwood at Capital Economics wrote in a note on Thursday that “AI demand may continue to grow but at a slower pace than expected.” They added that firms and investors may be underestimating the barriers to AI adoption. They also warned that while transformative technologies can be adopted widely. they may still fall short of generating financial returns soon enough to justify the massive scale of investments made by many firms.
Oil prices were also weaker early Thursday, trading below levels from before the Iran war began in late February. Traders said hopes have risen that crude supplies could improve markedly with the reopening of the Strait of Hormuz. the narrow waterway key for global oil transport. even though the number of ships crossing the strait is still limited.
Brent crude fell 0.9% to $70.93 per barrel, down from roughly $72 a barrel before the start of the war. Benchmark U.S. crude fell 0.8% to $68.03 per barrel.
The latest developments in the broader Middle East also fed into market tone. Oil slid after negotiators from the U.S. and Iran met separately with mediators from Qatar and Pakistan on Wednesday as traders looked for progress in talks aimed at achieving a permanent end to the war in Iran.
Currency moves added another layer to the day’s trading. The U.S. dollar was trading at 161.10 Japanese yen, down from 162.58 yen after the yen fell to a four-decade low against the dollar on Wednesday. The euro was trading at $1.1417, up from $1.1377.
Elsewhere in Asia. Hong Kong’s Hang Seng closed 0.8% higher at 23. 055.03. while BYD’s shares rose 8.1% after it reported sales rose for a second straight month. The Shanghai Composite index fell 2% to 4,028.90. Australia’s S&P/ASX 200 edged less than 0.1% higher to 8,724.50, and India’s Sensex climbed 0.6%.
global stocks chip sell-off Kospi Nikkei 225 SK Hynix Samsung Electronics TSMC Tokyo Electron oil prices Strait of Hormuz U.S. and Iran talks S&P 500 Nasdaq