The Japan Times - Stocks drop on tech sell-off, oil yo-yos on Mideast

Tech-driven losses in Asia came before European and US markets mostly traded lower.

"Fragile sentiment is leading to a continued pullback in memory chip stocks after their gravity-defying run as investors fret about elevated valuations," noted Dan Coatsworth, head of markets at AJ Bell trading group.

Seoul's Kospi fell more than six percent as chip titan SK hynix tumbled more than 11 percent amid growing anxiety that the AI rally -- which had pushed both firms to record highs this year -- has run its course.

Traders are questioning whether the vast sums pumped into the AI sector in recent years will eventually pay off and justify the eye-watering valuations for some firms.

Shares in TSMC fell around two percent in New York, even as the Taiwanese chipmaker issued positive forward guidance and announced that net profit soared more than 77 percent to a record high in the second quarter thanks to massive demand for AI hardware.

It said it would invest an additional $100 billion in the US state of Arizona.

Shares in Dutch firm ASML, which manufactures chip-making machines that underpin the tech industry, also fell after releasing blockbuster earnings on Wednesday.

"This all makes one wonder what US tech corporations will have to come up with to get investors genuinely excited again," said market analyst David Morrison at Trade Nation.

"This is important, as the earnings season picks up several gears over the next fortnight."

Netflix reports after New York markets close on Thursday.

Next week, Google's parent company Alphabet as well as Tesla release results.

Amazon, Apple, Meta and Microsoft are among the companies that publish results the week after.

Growth in US retail sales lost steam in June, data from the Commerce Department showed, rising by 0.2 percent month-on-month after a 1.0 percent jump in May.

"The key takeaway from the report is that the headline disappointments are misleading, as they were driven primarily by gasoline station sales" that fell 5.3 percent as the price of petrol fell, said Briefing.com analyst Patrick O'Hare.

"Excluding gasoline stations, retail sales were up a solid 0.7 percent in June on the heels of a 0.9 percent increase in May," he added.

On the corporate front Thursday, German food delivery group Delivery Hero said it had agreed to be taken over by US ride-hailing giant Uber in a 12.7-billion-euro ($14.6-billion) deal.

Delivery Hero's shares finished the day up 0.1 percent.

Oil prices wobbled as the US struck Iran and Tehran hit back at US allies in the Gulf on Thursday.

Meanwhile Yemen's Houthis warned they would target Saudi Arabia's oil facilities and other infrastructure if conflict escalates between the two sides.

Analysts at Capital Economics said if Houthis follow through with the threat or closed traffic in the Bab el-Mandeb Strait that would increase chances "global growth slows sharply enough to meet most definitions of a global recession".

- Key figures around 1530 GMT -

Brent North Sea Crude: FLAT at $84.97 a barrel

West Texas Intermediate: FLAT at $79.63 a barrel

New York - Dow: UP 0.2 percent at 52,775.61 points

New York - S&P 500: DOWN 0.1 percent at 7,563.35

New York - Nasdaq Composite: DOWN 0.7 percent at 26,080.68

London - FTSE 100: UP 0.5 percent at 10,572.24 (close)

Paris - CAC 40: DOWN less than 0.1 percent at 8,377.86 (close)

Frankfurt - DAX: DOWN 0.3 percent at 24,915.49 (close)

Tokyo - Nikkei 225: DOWN 2.8 percent at 66,835.54 (close)

Seoul - Kospi: DOWN 6.4 percent at 6,820.60 (close)

Hong Kong - Hang Seng Index: UP 1.3 percent at 25,008.60 (close)

Shanghai - Composite: DOWN 1.9 percent at 3,882.41 (close)

Euro/dollar: DOWN at $1.1440 from $1.1463 on Wednesday

Pound/dollar: DOWN at $1.3479 from $1.3530

Dollar/yen: UP at 162.46 yen from 162.27 yen

Euro/pound: UP at 84.87 pence from 84.72 pence

K.Yamaguchi--JT