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Chip sell-off drags down markets

A sharp retreat in semiconductor shares pushed Asian equities lower on Thursday, with South Korea’s Kospi suffering particularly heavy losses. Wall Street had ended Wednesday mixed, as gains in the Dow Jones Industrial Average and S&P 500 contrasted with a modest decline in the Nasdaq-100, while European markets lacked a clear direction. The US dollar continued to retreat and oil was slightly lower despite continued tensions between the US and Iran.

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

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Asian stocks slide as chipmakers fall

Asian equity markets declined on Thursday, led by Korea’s Kospi, which dropped 5.5% and briefly triggered a trading halt as Samsung Electronics and SK Hynix fell between 9% and 12%. Japan’s Nikkei 225 lost 2.9%, while mainland China’s CSI 300 declined 1.2% and Hong Kong’s Hang Seng Index gained 2.1%. Concerns over renewed US-Iran tensions and risks to shipping through the Strait of Hormuz added to fears of persistent energy inflation, although Brent crude and West Texas Intermediate were both trading slightly lower on Thursday. In central banking news, the Bank of Korea lifted its benchmark interest rate by 25 basis points to 2.75% on Thursday, its first increase since January 2023, as inflation remains above target.

US shares edge higher as Apple rallies

US equities finished mixed on Wednesday, with the Dow Jones Industrial Average gaining 0.3% to 52,658.64 points and the S&P 500 rising 0.4% to 7,572.40, while the Nasdaq-100 declined 0.3% to 29,502.60. A slower increase in US producer prices, following softer consumer inflation data on Tuesday, supported sentiment, although escalating tensions with Iran pushed oil prices higher. Apple shares rose 4% to a record high after strong iPhone sales data and regulatory approval for its Apple Intelligence platform in China, while PayPal surged more than 17% following reports of a potential takeover bid.

European equities end mixed

European equity markets closed without a clear direction on Wednesday as investors remained cautious at the start of the earnings season. The Euro Stoxx 50 fell 0.2% to 6270.75 points, while Switzerland’s SMI gained 0.5% to 14,307.31. Automakers and luxury-goods stocks led gains, with Swiss jeweller Richemont rising 6.7% after stronger-than-expected sales, while Kering and LVMH advanced 3.6% and 2.7%, respectively. ASML initially rallied after lifting its 2026 revenue target on robust artificial-intelligence demand, but ended 0.4% lower.

Bank of Canada holds rates steady

The Bank of Canada kept its policy rate at 2.25% on Wednesday and forecast an economic recovery despite heightened geopolitical and trade uncertainty. Canadian GDP was broadly unchanged between the first quarter of 2025 and the first quarter of 2026, with growth near zero and well below the bank’s previous 1.5% projection, partly due to weaker government spending, vehicle production and energy investment. The Bank of Canada estimates that a rebound in exports and residential investment in the second quarter will lift Canadian economic growth to just above 1% in the first half.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from ABB, Abbott Laboratories, GE Aerospace, Intuitive Surgical, Netflix, Prologis, Taiwan Semiconductor, and UnitedHealth.

Economic data in focus: UK gross domestic product (08:00), UK manufacturing production (08:00), UK trade balance (08:00), Italian Consumer Price Index (10:00), EU trade balance (11:00), Italian trade balance (11:00), US retail sales (14:30), Philly Fed Manufacturing Index (14:30) and US weekly initial jobless claims (14:30).

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