Today's Edition
LONDON (REUTERS)
Shares turned on Friday as defensive investors wobbled ahead of the weekend, wary of any flare-up in Middle East hostilities with US-Iran peace talks in limbo.
Meanwhile, an AI-driven selloff after chipmaker Broadcom reported underwhelming results on Wednesday continued into a second day, as investors took profits following a blistering rally.
The pan-European STOXX 600 index edged up 0.2%, erasing earlier losses and outperforming a 2% slide in MSCI's broadest index of Asia-Pacific shares outside Japan as South Korea's tech-heavy Kospi plunged 7%.
“(It) seems like quite a risk-off today,” said Charu Chanana, chief investment strategist at Saxo.
“Korea has been one of the biggest beneficiaries of the AI memory supercycle, so when Broadcom disappointed on AI expectations, investors quickly de-risked the whole semiconductor chain,” she said.
“The issue is not that AI demand has disappeared - it is that expectations had become extremely high, and even good numbers are no longer enough unless guidance keeps moving higher.”
Nasdaq futures fell 1% and S&P 500 futures eased 0.4%, after a mixed session on Wall Street overnight.
Cryptocurrencies extended recent declines, with bitcoin shedding 2% to $62,307 and heading for a weekly decline of 15%, its biggest since the week FTX collapsed in November 2022, while ether was down 5.7% at $1,671.
Oil prices eased slightly on the day. Brent crude futures fell 50 cents to $94.53 a barrel and US crude edged down 0.5% to $92.61 per barrel, with both contracts set to post their first weekly gain in three weeks.
In currencies, the dollar was on track for a 0.5% weekly rise supported by the Middle East conflict. The yen languished near the 160 per dollar level and was last 0.1% stronger at 159.95, as Japanese officials ramped up warnings on the ailing currency, keeping traders on alert for further intervention from Tokyo. Data on Friday showed Japan's foreign reserves fell by $77 billion in May.
Focus now turns to the closely watched US nonfarm payrolls data due later in the day.
Market forecasts are for a solid rise of 85,000 in employment, keeping the jobless rate steady at 4.3%.
