Stock markets: Seoul sends fresh shockwaves through the tech sector; Wall Street sees volatility, Milan down 0.7%
Following the turbulence in the early part of the session, Wall Street is attempting to shake off concerns about AI by focusing on quarterly results. Oil prices are still falling, down by more than 5 per cent. Saipem shares plummet on the Milan Stock Exchange
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(Il Sole 24 Ore Radiocor) – A new shockwave from Asia is hitting the tech sector, spreading to Europe, with share prices holding steady except for the FTSE MIB in Milan (FTSE MIB), dragged down by Stmicroelectronics and Prysmian as well as by Saipem . The sell-off hit the Tokyo Stock Exchange (Nikkei 225 ) and the Seoul Stock Exchange (-10.8%), partly due to rumours of significant advances by China in semiconductor technology. The announcement was interpreted as a sign of China’s ability to narrow the gap with Western technologies in a sector considered crucial for artificial intelligence. Consequently, Samsung Electronics (-13%) and SK hynix (-13.7%) – which together account for around half of the Kospi’s market capitalisation – took a hit, making the index more susceptible to fluctuations linked to market sentiment regarding the technology sector.
But the downturn in the tech sector has not spared Wall Street either, where tech shares have entered a correction phase, following the collapse of global chip manufacturers, whilst fears are mounting over the resilience of the AI sector ahead of the US Big Tech firms’ earnings reports. As a result, the Nasdaq 100 index has lost over 10 per cent from its all-time high in early June. In the background, attention remains focused, on the one hand, on the Fed’s interest rate decision due on Wednesday, and on the other, developments in the Middle East, with talks between the US and Iran appearing to proceed despite mutual threats. However, the market appears to believe that an agreement is possible, and the price of oil continues to fall.
Wall Street: DJ +1.03%, Nasdaq -0.22%
Wall Street closes on a mixed note. The Dow Jones rose by 1.03% to 52,747.53 points, the Nasdaq fell by 0.22% to 24,876.91 points, whilst the S&P 500 rose by 0.22% to 7,429.22 points, buoyed, like the Dow Jones, by quarterly results and the fall in oil prices.
The Nasdaq 100is weighed down by the performance of tech stocks, although it has rebounded from the lows that had temporarily pushed it into correction territory, having fallen by more than 10 per cent from its early June highs.
It was the news of negotiations between Nvidia and OpenAI, with the chip giant set to commit to providing financial backing of around $250 billion to ChatGPT’s parent company as part of a massive data centre project in Ohio. This is yet another astronomical sum being channelled into the development of artificial intelligence, although it is still difficult to see how and when these investments will translate into profits. “Greed has turned to fear for AI-related semiconductor stocks,” explain analysts at Union Bancaire Privée. “Investors are now interpreting every piece of news negatively and using it as an excuse to sell, rather than critically analysing its real impact”. In other news today, Apple has broken through the $5,000 billion market capitalisation mark, becoming the second company in the world to reach this historic milestone after Nvidia.
