Global stocks headed for a second day of losses on Thursday as a sharp sell-off in technology shares and renewed tensions in the Middle East weakened investor sentiment, while oil prices eased from recent highs following a ceasefire agreement between Israel and Lebanon.
European bourses opened broadly steady as crude prices and bond yields dipped, but Wall Street futures pointed lower and Asian markets ended weaker, led by technology shares.
South Korea’s stock market fell as much as 2.6 per cent, while Japan’s Nikkei 225, Hong Kong and Taiwan closed between 1.4 per cent and 1.7 per cent lower after chipmaker Broadcom’s shares plunged 13 per cent in extended US trading on Wednesday.
Broadcom missed second-quarter revenue expectations and kept its long-range sales forecast unchanged, disappointing investors who had expected stronger signals from a major beneficiary of the artificial intelligence investment boom.
Marlborough fund manager James Athey said the weakness suggested equity markets may need time to consolidate after a strong rally. He said the Broadcom update raised questions over whether chip demand would continue expanding at the same pace.
Brent crude was almost 1 per cent lower at about $97 a barrel after Israel and Lebanon agreed a ceasefire, conditional on a complete halt to fire by the Iran-aligned Hezbollah militia.
However, there were few signs of an imminent US-Iran peace deal despite US President Donald Trump saying progress could be made by the weekend.
Bahrain said it had intercepted three missiles and several drones, while Kuwait briefly suspended air traffic following an attack.
Iranian Foreign Minister Abbas Araghchi said no tangible progress had been made in talks with the United States and warned that any hostile act would receive an immediate response.
In currency markets, the yen edged up to 159.9 per dollar, moving away from the 160 level viewed by traders as a possible trigger for Japanese intervention.
Japan’s Chief Cabinet Secretary Minoru Kihara said he expected the Bank of Japan to coordinate its moves with the government after BOJ Governor Kazuo Ueda signalled that an interest rate increase could be considered this month.
The US dollar index was broadly steady near a two-month high at 99.45 after stronger-than-expected US services data on Wednesday.
The ISM services figures showed businesses had placed orders and rebuilt inventories in anticipation of possible shortages and higher prices linked to the Iran conflict.
The Republican-led US House of Representatives approved a war powers resolution on Wednesday aimed at blocking Trump from continuing the conflict against Iran. The measure is largely symbolic because it must still pass the Senate and would require a two-thirds majority in both chambers to override an expected presidential veto.
In bond markets, the US 10-year Treasury yield was steady at 4.489 per cent, while Germany’s Bund yield fell 1.5 basis points to 3.02 per cent ahead of an expected European Central Bank rate decision next week.
The Australian dollar and gold briefly gained after a rebound in resource exports helped Australia’s trade balance return to surplus.
Bitcoin fell 2.4 per cent to below $64,000, extending losses that have reached almost 25 per cent in recent weeks.
Investors are watching Middle East developments, oil prices, central bank signals and technology earnings for signs of whether the risk-off mood will deepen._Reuters
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