LONDON - Shares slid on Friday as investors turned defensive ahead of the weekend, wary of the flare-up in Middle East tensions with US-Iran peace talks in limbo.
An AI-driven selloff after chipmaker Broadcom reported underwhelming results on Wednesday continued into a second day, as investors took profits following a blistering recent rally.
The pan-European STOXX 600 index slipped 0.2 percent, led by declines in tech stocks which have risen 33 percent in the past two months, the most among sectors in the broader index.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 2.23 percent in Asian trade, with South Korea's tech-heavy Kospi plunging as much as 7 percent.
"(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 1.2 percent and S&P 500 futures eased 0.6 percent, after a mixed session on Wall Street overnight.
Cryptocurrencies extended recent declines, with bitcoin shedding 1.4 percent to $62,725.54 and heading for a weekly decline of 15 percent, its biggest since the week FTX collapsed in November 2022, while ether was down 2.3 percent at $1,732.09.
Oil set for weekly gain
Oil prices eased slightly after Oman said operations at Mina al Fahal port were proceeding normally following an earlier Reuters report that oil loadings had been suspended after an explosion.
Brent crude futures fell 24 cents to $94.79 a barrel and US crude edged down 0.6 percent to $92.48 per barrel, with both contracts set to post their first weekly gain in three weeks.
Kristian Kerr, head of macro strategy at LPL Financial, said markets were underestimating the complexities involved in restoring shipping through the Strait of Hormuz to pre-conflict levels, even if Washington and Tehran reach a memorandum of understanding.
"Any early increase in barrels is likely to come from already produced crude, including crude sitting on stranded or floating vessels and Iranian cargoes in storage, rather than a sustained restart in production or exports," he said.
"In other words, this is more about clearing existing bottlenecks than reflating the supply base."
Eyes on US nonfarm payrolls
In currencies, the dollar was on track for a 0.5 percent weekly rise supported by the Middle East conflict.
The yen languished near the 160 per dollar level and was last 0.1 percent 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 percent. Anything stronger would likely see the odds of a Federal Reserve rate hike narrow further.
