Heavy selloffs in tech stocks hammered equity markets Thursday, tracking a plunge on Wall Street as disappointing earnings caused traders to panic that a long-running rally in the sector may have been overdone.
Paris tumbled more than two per cent nearing the half-way stage after Tokyo closed down 3.3 per cent, as a stronger yen added to the downward pressure on Japanese exporters.
鈥楨arnings season jitters have really taken hold,鈥� noted Joshua Mahony, chief market analyst at Scope Markets.
鈥楾he risk-off sentiment permeating through financial markets has done little to help traditional havens such as the dollar and gold, with both losing ground alongside equities.鈥�
Oil prices slid nearly two per cent Thursday.
Shares in French-Italian chip maker STMicroelectronics plunged 14 per cent and Infineon Technologies shed more than six per cent.
Nearly all sectors suffered, however, with Renault crashing over nine per cent and Gucci owner Kering down seven per cent.
Among the rare risers was consumer goods giant Unilever, which jumped nearly six per cent on well-received earnings.
Global stocks had pushed ever higher this year 鈥� with New York鈥檚 three main indexes hitting multiple records.
Tech titans such as Google parent Alphabet and chipmakers Nvidia and TSMC have been boosted by an explosion of interest in all things linked to artificial intelligence.
The rallies have been helped by blockbuster profits and upbeat outlooks, causing investors to pile in with cash owing to a fear of missing out.
However, with valuations pushing to dizzying heights, analysts have been warning about retreat, and Tuesday鈥檚 earnings from Tesla and Alphabet provided a selling opportunity.
Tesla said profits fell 45 per cent in the second quarter owing to price cuts and aggressive AI investment.
Seoul鈥檚 SK Hynix dived nearly nine per cent Thursday despite strong earnings, while Samsung lost two per cent.
Tokyo-listed Sony was off more than five per cent and Japanese investment giant SoftBank, which has pivoted into AI technologies, gave up 9.4 per cent.
Hong Kong and Shanghai fell despite a surprise cut in a key rate by the Chinese central bank.
The earnings shock comes as major economies struggle to mount growth recoveries even as central banks start to cut interest rates in the face of cooler inflation.
Business confidence in Europe鈥檚 biggest聽economy聽Germany unexpectedly weakened in July, a closely-watched survey showed Thursday.
The Ifo institute鈥檚 confidence barometer, based on a survey of around 9,000 companies, declined to 87 points from 88.6 points in June.聽
The fall was the third in a row and surprised analysts who had been expecting a small improvement in business morale.
