LGT Navigator

Tech sell-off hits Asian markets before US payrolls

Asian equities slid on Friday as a sell-off in technology shares gathered pace after Broadcom’s disappointing outlook rattled sentiment on Wall Street, with South Korean stocks leading the regional losses. US stocks had closed mixed on Thursday, with the Dow Jones reaching a fresh record even as the Nasdaq retreated, while European equities finished higher. Investors are now looking ahead to Friday’s US nonfarm payrolls report, which could shape expectations for the Federal Reserve after Thursday’s rise in weekly jobless claims pointed to some cooling in the labour market.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

© Shutterstock

South Korean equities led losses in Asia on Friday, with the Kospi falling 5.1% as weakness in US technology shares spread through regional markets. Samsung Electronics lost 4.8% and SK Hynix fell 7.8%, while Japan’s Nikkei 225 declined 1.3%, Australia’s S&P/ASX 200 dropped 0.7% and Hong Kong’s Hang Seng index slipped 1.2%. India’s Nifty 50 was little changed, after the country's central bank kept its key interest rate unchanged at 5.25%, while raising its inflation forecast for the financial year ending in March 2027 to 5.1% from 4.6% and cutting its growth outlook to 6.6% from 6.9%. Looking beyond equity markets, gold and silver were both under pressure on Friday, trading around USD 4440 and USD 72 per ounce, respectively. The US dollar was stable, while bitcoin continued to slide, trading around USD 62,400.

US stocks mixed as Nasdaq slips

US stocks closed mixed on Thursday as the Nasdaq 100 fell 0.5% to 30,407.81 points, while the S&P 500 rose 0.4% to 7584.31 and the Dow Jones Industrial Average gained 1.7% to a record 51,561.93. Technology shares came under pressure after chipmaker Broadcom dropped 12.6% on a weaker-than-hoped-for outlook, dragging other semiconductor stocks lower despite gains in several large-cap technology names, including Nvidia. Investors instead rotated into more defensive sectors, with financial and healthcare shares supporting the Dow, while easing hopes for a ceasefire in Lebanon also helped push oil prices lower. In macroeconomic data, initial US jobless claims rose to 225,000 in the week to 30 May, up from 212,000 in the previous week, according to data released on Thursday, signalling some cooling in labour demand while remaining within the range seen this year. Despite more announced layoffs in the technology sector, the report suggested the broader labour market remained stable, with low layoffs continuing to support employment conditions ahead of today's US nonfarm payrolls release.

Swiss inflation edges higher in May

Swiss consumer prices rose 0.2% in May from April, with annual inflation at 0.6%, according to data released on Thursday by the Federal Statistical Office. The yearly rate was unchanged from April, while core inflation accelerated slightly to 0.3% from 0.1% in the previous month. The monthly increase was driven mainly by higher rents and hotel prices, alongside gains in fruiting vegetables, petrol, car rental and car sharing, while air fares, heating oil and supplementary accommodation became cheaper. Meanwhile, Switzerland’s unemployment rate was unchanged at 3% in May, according to data released separately on Thursday by SECO, as the number of unemployed people fell by 2627 from April to 140,275. That was still up from 127,944 a year earlier, while the seasonally adjusted jobless rate edged up to 3.1% from 3%. Switzerland’s Swiss Market Index advanced on Thursday, gaining 0.9%.

Euro-area retail sales fall in April

Retail trade volumes in the eurozone fell 0.4% in April from March, according to data released on Thursday by Eurostat, after a revised 0.8% increase in the previous month. Sales were still 1% higher than a year earlier, though that was slower than the 2.1% annual increase recorded in March. The monthly decline reflected weaker non-food sales and a sharp drop in fuel purchases, which outweighed stronger food, drinks and tobacco sales. Across the bloc, the steepest monthly falls were in Denmark, Romania, Belgium and Slovakia, while Lithuania posted the strongest increase. European stock indices closed higher on Thursday. The Euro Stoxx 50 gained 0.8%, while Germany’s DAX rose 0.6% and France’s CAC 40 added 1.2%.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Swiss foreign currency reserves (09:00), Euro-area gross domestic product (11:00), Italian retail sales (11:00), US nonfarm payrolls and unemployment rate (14:30), Canadian unemployment rate (14:30).

LGT helps you make informed investment decisions

Global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Imprint
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.