Macro update
Samsung posts record profit growth but shares tumble: Samsung Electronics forecast a 19-fold increase in second-quarter operating profit to 89.4 trillion won, exceeding market expectations, but its shares fell by as much as 10% as investors questioned the sustainability of the AI-driven semiconductor boom, erasing more than $100 billion from its market capitalisation.
Asian technology stocks come under heavy selling pressure: South Korea’s KOSPI plunged 8%, triggering circuit breakers, while Japan’s Nikkei declined as semiconductor-related stocks, including Kioxia and Advantest, moved sharply lower. MSCI’s Asia-Pacific index excluding Japan also fell 2.6%.
Investors rotate into Japanese value stocks: Financial and value shares outperformed as investors shifted away from high-growth technology names, with Mitsubishi UFJ rising 3% and the Topix Value Index advancing even as the Growth Index declined, in what strategists described as a healthy market rotation.
Oil prices edge higher as supply outlook remains in focus: Brent crude gained 0.5% to $72.37 a barrel and WTI rose 0.4% to $68.85, remaining close to pre-Iran conflict levels as easing geopolitical tensions shifted attention towards recovering Gulf exports and higher production from OPEC+ members and the UAE.
Wall Street advances on strength in chip stocks: The S&P 500 rose 0.72% and the Nasdaq gained 1.12%, supported by a 3.7% rally in Broadcom after it extended its custom-chip supply agreement with Apple through 2031, although Microsoft fell after announcing plans to cut 4,800 jobs.
Yen stabilises near multi-decade lows: The Japanese currency recovered modestly to around ¥161.79 per dollar after briefly weakening beyond ¥162, with traders remaining alert to the possibility of official intervention, while Japanese government bond yields eased following strong demand at an auction of super-long-dated debt.
