LGT Navigator

Asian stocks fall on AI doubts

Asian equities traded lower on Tuesday as investors questioned whether profits across the semiconductor sector can continue to justify lofty AI-related valuations, even after Samsung Electronics reported another record quarterly operating profit. South Korean and Japanese stocks led the declines. In contrast, US equities closed higher on Monday, while European markets were mixed to slightly lower. Gold prices eased, with spot gold falling 0.9%, as a firmer US dollar and caution ahead of minutes from the Federal Reserve’s June meeting weighed on the metal. Brent crude oil and West Texas Intermediate (WTI) were both higher, trading around USD 72.61 and USD 69.13 per barrel, respectively, following reports of fresh attacks on commercial ships by Iran's military in the Strait of Hormuz.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

© Shutterstock

Asian equities weakened on Tuesday as investors questioned whether profits across the semiconductor industry can continue to justify lofty AI-related valuations, even after South Korea’s Samsung Electronics, the world’s largest memory-chip maker, reported another record quarterly operating profit. Samsung shares fell nearly 10%, pulling South Korea’s KOSPI down 7.2%, while Japan’s Nikkei 225 lost 2.2% as selling spread through the region’s chip supply chain. Hong Kong’s Hang Seng Index was down 0.8%, mainland China’s CSI 300 fell 1.6% and Australia’s S&P/ASX 200 was 0.5% lower. Investors are now looking ahead to regional inflation data and central bank decisions later this week.

Samsung profit surges

Samsung Electronics said on Tuesday that its operating profit for the second quarter is expected to reach KRW 89.4 trillion, up about 1800% from a year earlier, as strong demand and tight supply in AI memory chips supported prices. The South Korean technology group also forecast second-quarter sales of about KRW 171 trillion, more than double the level of the same period last year, and said it would publish full results later this month. Samsung shares nevertheless fell, with investors having hoped for an even stronger performance. The company’s latest guidance marks its third straight record quarterly operating profit and highlights how heavily the chip sector is still benefiting from the AI investment boom.

US chip rally lifts Nasdaq

US stocks rose on Monday, led by semiconductor shares, with the Nasdaq 100 climbing 1.3% to 29,697.87, the S&P 500 gaining 0.7% to 7537.43 and the Dow Jones Industrial Average adding 0.3% to a record close of 53,055.91. Chipmakers including Qualcomm, Microchip, Texas Instruments and AMD advanced between 3.5% and 6.6% as investors looked ahead to Samsung results on Tuesday and a roughly USD 28 billion US listing by South Korea’s SK Hynix in a week otherwise short on major economic releases and essentially void of US earnings.

European stocks edge lower

European stock markets mostly slipped on Monday, with the EuroStoxx 50 falling 0.3% after touching another record high earlier in the session, while Germany’s DAX edged up 0.2% and France’s CAC 40 lost 0.3%. Defensive sectors including utilities, healthcare and food stocks were among the weakest performers, European defence shares drew support from deal activity and the upcoming Nato summit, with France’s Thales rising after agreeing to buy underwater-drone specialist Exail Technologies.

Swiss unemployment falls in June

Swiss unemployment fell to 137,751 in June from 140,275 in May, while the jobless rate eased to 2.9% from 3.0%, according to SECO data released on Monday. Compared with June last year, the number of unemployed people was 8.6% higher, and the seasonally adjusted total rose 1.7% on the month to 147,087 as the adjusted unemployment rate held at 3.1%. Switzerland’s SMI dropped 0.9% on Monday, with Swiss pharmaceutical groups Roche and Novartis weighing on the index. 

Corporate and economic calendar

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

Economic data in focus: German manufacturing production (08:00), French trade balance (08:45), Swiss foreign currency reserves (09:00), Bank of England monetary policy meeting minutes (11:30), Canadian trade balance (14:30), US trade balance (14:30), Canadian Purchasing Managers’ Index (15:30).

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.