Volkswacht Bodensee - Tech share selloff rolls on, oil prices jump on Mideast clashes

Tech shares have been under pressure in recent days on questions about their lofty valuations following Nasdaq's surge in the second quarter.

With semiconductor companies the worst hit in the selloff, Nvidia briefly lost its crown to Apple as the world's most valuable publicly traded company.

In recent weeks, some doubts have cracked the AI bonanza narrative, with analysts wondering if huge investments can be recovered through the adoption of the new AI products being released to the public.

Adding to worries about tech, Chinese startup Moonshot AI on Friday released a model that experts said could rival some of the more advanced offerings from US labs.

"Tech weakness is driving the risk off sentiment," said Angelo Kourkafas from Edward Jones. "We have seen more volatility in the space as investors question both the pace and the payoff of the investments made."

All three major US indices retreated, led by the tech-focused Nasdaq which lost 1.4 percent.

Kourkafas also cited the latest jump in oil prices as a factor in stock market weakness. Oil prices jumped more than four percent on renewed fighting between the United States and Iran, intensifying a clash over control of the Strait of Hormuz, a key waterway in petroleum transport.

International benchmark Brent North Sea crude closed at $88.10 a barrel.

"The technology selloff is not the only reason markets are in a sour mood," noted Ipek Ozkardeskaya, senior analyst at Swissquote bank.

"Developments in the Middle East are getting worse by the hour."

Trade Nation analyst David Morrison said: "The ongoing conflict, combined with threats to major shipping routes such as the Strait of Hormuz and potentially the Red Sea, has increased uncertainty across global financial markets."

Earlier on, Asian and European stock markets also took their cue from Wall Street's finish on Thursday, where sharp falls in Nvidia and Amazon helped drag down the Nasdaq by more than one percent.

The Nasdaq's slide intensified on Friday, with Netflix shares tumbling more than seven percent as the streaming giant warned of slowing sales growth.

With South Korea enjoying a holiday on Friday, Tokyo and Taipei -- also heavily weighted toward tech -- were at the forefront of Asia's latest selling heading into the weekend.

Japan's Nikkei ended the day down four percent with shares in semiconductor tester Advantest, Tokyo Electron and tech investment titan SoftBank each sliding more than seven percent.

Chipmaker Kioxia collapsed 16 percent, meaning it has lost around half its value since briefly becoming Japan's biggest firm by market capitalization last month.

Taiwan's Taiex index had shed 6.5 percent by the close Friday, as chipmaker TSMC retreated more than seven percent -- a day after announcing record second-quarter profits and that it would invest a further $100 billion in the US state of Arizona.

Europe's main stock markets closed mostly lower. London rose thanks to its share listings of energy giants, which climbed on rising oil prices.

- Key figures around 2020 GMT -

Brent North Sea Crude: UP 4.6 percent at $88.10 a barrel

West Texas Intermediate: UP 4.5 percent at $82.49 a barrel

New York - Dow: DOWN 0.8 percent at 52,146.42 (close)

New York - S&P 500: DOWN 1.0 percent at 7,457.69 (close)

New York - Nasdaq Composite: DOWN 1.4 percent at 25,520.24 (close)

London - FTSE 100: UP 0.3 percent at 10,600.37 (close)

Paris - CAC 40: DOWN 0.5 percent at 8,338.81 (close)

Frankfurt - DAX: DOWN 0.3 percent at 24,830.98 (close)

Tokyo - Nikkei 225: DOWN 4.0 percent at 64,141.12 (close)

Hong Kong - Hang Seng Index: DOWN 1.8 percent at 24,562.24 (close)

Shanghai - Composite: DOWN 3.1 percent at 3,764.15 (close)

Euro/dollar: DOWN at $1.1439 from $1.1442 on Thursday

Pound/dollar: DOWN at $1.3457 from $1.3478

Dollar/yen: UP at 162.44 yen from 162.39 yen

Euro/pound: UP at 85.00 pence from 84.89 pence

burs-jmb/jgc

R.Fischer--VB