Global Markets-Asian shares fall on chipmaker drag, bonds cheer cooler inflation

Surprisingly soft U.S. PPI data for June added to the benign consumer inflation figures a day earlier, as markets now priced out the risk of an imminent rate hike from the U.S. Federal Reserve this month to just 10%, from 43% earlier in the month. The pullback in inflation may prove only temporary, with oil prices climbing on the renewed Middle East hostilities. Bond investors, however, focused on cooler inflation data. Two-year Treasury yields edged up 2 basis points to 4.1514%, after falling 14 bps over the past two days. Ten-year yields inched up 1 bp at 4.5594%, having been down 7 bps over the past two days. That pulled the dollar down, except for against the beleaguered yen. The dollar index was steady at 100.52, after falling 0.4% overnight to the lowest since June 18. The yen hovered at 162.15, not far from the 40-year low of 162.84 as speculators remain wary of Japanese intervention. Sterling hit two-month highs on expectations that Andy Burnham, who is likely to be named new Labour Party leader on Friday, will pick a fiscally conservative finance minister. The pound was flat at $1.3532, after surging 1% overnight. Gold was off 0.8% at $4,027 an ounce. Asian shares fell on Thursday as a sell-off in chipmakers overshadowed stellar earnings from industry bellwether TSMC, while bonds benefited from another benign reading on U.S. inflation that lessened the risk of an imminent rate hike. Oil prices turned lower as the U.S. completed its latest strikes on Iran. Hostilities have been heating up in the Middle East in recent days, with Washington launching attacks on Iran and Tehran targeting U.S. bases in Kuwait and Jordan. Brent crude futures were last 0.5% lower at $84.5 a barrel but were up 11% this week. Taiwan Semiconductor Manufacturing Co's (TSMC) 2330.TW, the world's largest contract manufacturer of advanced AI chips, reported a 77% jump in second-quarter profit to a record that was far ahead of market forecasts. Ahead of the results, TSMC stock closed up 1.2%, but that was not enough to reverse the fall in chipmakers in Asia. MSCI’s broadest index of Asia-Pacific shares outside Japan slid 1% as South Korea's KOSPI slumped 6.2% on weakness from Samsung, down 6.6%, and SK Hynix, down 9%. Japan’s Nikkei dropped 3%. China’s Hang Seng Index bucked the trend with a 1.8% gain. "Seeing aggressive pullback in Memory/Hardware," Brian Heavey, an equity trader at JPMorgan, said in a note. "Don't think there's a smoking gun 'negative' headline driving semis/hardware selloff. I think just shows how high the bar is for semis earnings." Overnight, shares of ASML, the world's dominant supplier of equipment needed to make high-tech computer chips, finished 0.4% lower even after it raised its 2026 sales forecasts and pledged a capacity boost. Wall Street gained overnight as investors rotated out of semiconductors into Magnificent Seven stocks and banks after robust earnings from major lenders, but Asia is more vulnerable to the chip sell-off given its heavier exposure to semiconductor stocks. European bourses are headed for a slightly higher open, with pan-region stock futures up 0.2%. Wall Street futures were mostly flat in Asia.

Global Markets-Asian shares fall on chipmaker drag, bonds cheer cooler inflation

Bonds rise on cooler inflation data

Asian shares fall as chipmakers slide

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