BANGKOK — World shares retreated Friday, led by heavy losses in Japan and South Korea as traders sold to lock in gains from recent rallies in stocks related to artificial intelligence.
In early European trading, Germany’s DAX gave up 0.8 per cent to 24,793.58, while the CAC 40 in Paris lost 0.4 per cent to 8,398.14. Britain’s FTSE 100 shed 0.4 per cent to 10,490.62.
The future for the S&P 500 lost 0.2 per cent while that for the Dow Jones Industrial Average edged 0.2 per cent higher.
In Asia, Tokyo’s Nikkei 225 index shed 4.2 per cent to 69,360.88 and the Kospi in Seoul plunged 5.8 per cent to 8,411.21. Both recovered some ground lost earlier in the day.
Hong Kong’s Hang Seng lost 1.8 per cent to 22,667.13, while the Shanghai Composite index slipped 2.3 per cent to 4,027.26.
In Australia, the S&P/ASX 200 was an outlier, gaining 0.2 per cent to 8,764.20.
Taiwan’s Taiex gave up 3.6 per cent.
The wide swings in Tokyo and Seoul are typical of recent volatility in markets as investors react to the deluge of dollars heading into AI data centers and other investments. Shares in Japan and South Korea hit records this week and logged strong gains on Thursday after chipmakers Qualcomm and Micron Technology reported better than expected earnings.
In South Korea, market trends have been dominated by movements in stock in Samsung Electronics, the country’s biggest company, and chipmaker SK Hynix, which like Samsung is collaborating with Nvidia on artificial intelligence.
Given that concentration, “a strong Micron print can produce a powerful upside chase one day; a new concern around memory costs, capex, or the durability of AI demand can reverse it violently the next,” Stephen Innes of SPI Asset Management said in a commentary.
Samsung’s shares lost 5.3 per cent on Friday, while those of SK Hynix fell 8.4 per cent. In Tokyo trading, technology giant SoftBank Group Corp. lost 12.5 per cent and computer chip testing equipment maker Advantest sank 3.2 per cent.
On Thursday, the U.S. stock market drifted to a mixed finish after several AI stocks veered back up the roller coaster, while Apple shares dropped 6.1 per cent after the company hiked prices on many of its products.
The S&P 500 finished nearly unchanged with a dip of less than 0.1 per cent after swinging between gains and losses throughout the day. The Dow Jones Industrial Average added 71 points, or 0.1 per cent, and the Nasdaq composite fell 0.5 per cent.
Micron Technology helped lead the market after jumping 15.7 per cent. The maker of computer memory reported much bigger profit and revenue for the latest quarter than analysts expected, and it gave a stronger growth forecast for the current quarter than Wall Street expected. That helped allay worries a bit that its stock had grown too expensive after coming into the day with a surge of 267 per cent so far this year.
Micron and AI stocks broadly have been under intermittent pressure recently because of worries that their profits can’t possibly keep pace with the tremendous rallies for their stock prices. Beyond Micron, Qualcomm said late Wednesday that the acceleration of the AI era is forcing it to upgrade forecasts for its own growth in upcoming years.
SpaceX, meanwhile, fell 1 per cent to drop below US$153 for its lowest finish since its vaunted debut on the Nasdaq earlier this month.
While the AI boom regularly roils tech shares, other sectors have held relatively steady, noted Thomas Mathews of Capital Economics.
“Even if the AI boom turned into a bust the ‘non-tech’ parts of the stock market could conceivably shrug it off for a while, as they have this week,” he wrote in a report.
A report released Thursday showed U.S. inflation is behaving pretty much as economists expected, climbing to 4.1 per cent last month from 3.8 per cent in April. The hope is that it will ease because of a drop-off in oil prices.
The price for a barrel of Brent crude oil, the international standard, declined 2.3 per cent to $73.77 per barrel early Friday. It has fallen from its highs above $100 caused by the closure of the Strait of Hormuz because of the Iran war, which slowed the global flow of oil.
U.S. benchmark crude oil lost 2.4 per cent to $70.17.
In currency trading, the U.S. dollar fell to 161.65 Japanese yen from 161.80 yen. The euro rose to $1.1387 from $1.1371.
Elaine Kurtenbach, The Associated Press
