HONG KONG: Global stock markets diverged on Thursday (Aug 6) as investors assessed the latest corporate earnings with tech firms back under pressure, while awaiting developments over a potential United States-Iran deal to reopen the Strait of Hormuz.
Oil prices edged higher as investors sought confirmation that a deal was progressing.
London, Paris and Frankfurt stock markets were all higher nearing midday.
Alcoholic drinks maker Diageo jumped 7 per cent to top London’s FTSE 100 index as it unveiled a major cost-cutting plan to help reverse sliding profit.
Shares in industrial giant Siemens fell 5 per cent in Frankfurt after its forecasts fell short of investors’ hopes.
In Asia, tech-heavy indices were weighed down by concerns over the profitability of artificial intelligence investments after disappointing earnings from US giants SanDisk and Western Digital.
A sharp decline in shares of Elon Musk’s SpaceX on Wednesday also soured the mood, after its earnings results raised worries about huge AI spending.
Tech stocks had staged a rally earlier this week, after a month-long rout that slashed billions of dollars off valuations.
Seoul – the poster child of the sell-off since June – shed more than 4 per cent on Thursday, led by a 10 per cent plunge in SK Hynix and Samsung’s loss of more than 6 per cent.
Tokyo’s Nikkei – another tech-heavy index – lost nearly 1 per cent, with chipmaker Kioxia down more than 10 per cent and Tokyo Electron more than 5 per cent lower.
There was also selling in Hong Kong, Wellington, Manila and Taipei, though Shanghai, Sydney and Singapore rose.
Easing tensions in the Middle East and comments from Washington about a US-Iran deal to reopen the Strait of Hormuz have helped keep a lid on oil prices and tempered inflation and rate hike concerns.
Iran said on Wednesday it had agreed on a route with Oman for ships transiting the waterway and was adding the final touches to arrangements for jointly managing it.
Official sources briefing Iranian media stressed that any reopening would depend on the US fulfilling what Tehran sees as its commitment to end its own naval blockade of Iran’s ports.
“Caution in the oil price today is a sign that the market needs confirmation from the White House that this is all true, and the prospects of a deal to reopen the Strait of Hormuz is not a false dawn,” said Kathleen Brooks, research director at traders XTB.
Investors are keenly awaiting the release of key US jobs data on Friday, hoping for an idea about the state of the economy as the Federal Reserve plots its next moves on borrowing costs.
Figures on Wednesday showed hiring in the US private sector was significantly below expectations in July, with industries like leisure and hospitality shedding jobs.
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