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GLOBAL MARKETS-Asian shares slump on chipmaker drag, bonds cheer cooler inflation
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GLOBAL MARKETS-Asian shares slump on chipmaker drag, bonds cheer cooler inflation
Jul 15, 2026 7:35 PM

* Japan's Nikkei down 3%, South Korea plunges over 6%

* All eyes on TSMC earnings but bar to please is high

* Bonds benefits from cooler PPI data, little risk of July

Fed hike

By Stella Qiu

SYDNEY, July 16 (Reuters) - Asian shares fell on Thursday as

chipmakers stumbled ahead of results from bellwether TSMC, while

bonds benefited from another benign reading on U.S. inflation

that lessened the risk of an imminent rate hike.

Oil prices, however, kept climbing as hostilities heated up

in the Middle East. Washington continued striking Iran after

reimposing a naval blockade of its ports, while Tehran warned of

an "existential war" with America. Brent crude futures

rose 0.6% to $85.45 a barrel, adding to this week's gain of 12%.

All eyes are on the quarterly earnings from Taiwan

Semiconductor Manufacturing Co's ( TSM ) , the world's

largest manufacturer of advanced AI chips. The company is

expected to notch a fifth consecutive quarter of record

earnings, with a 59% surge in net profit for April-June.

However, investors are proving hard to please as 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.

"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."

The selling spilled over to Asia. MSCI's broadest index of

Asia-Pacific shares outside Japan slid 1.7% as

South Korea's KOSPI slumped 6.3% on weakness from

Samsung, down 8%, and SK Hynix ( SKHY ), down

11%.

Japan's Nikkei dropped 3%. Taiwanese shares

fell 0.5%, while China's Hang Seng Index gained 1.2%.

South Korea's central bank raised interest rates for the

first time in 3-1/2 years to 2.75% on Thursday to stabilise a

slumping won and counter persistent inflationary pressure. The

decision was largely as expected.

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.

BONDS CHEER COOL 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.

However, the pullback in inflation is likely only temporary,

with oil prices climbing on the renewed Middle East hostilities.

The Wall Street Journal reported President Donald Trump is

leaning towards expanding U.S. military operations in Iran,

including sending ground forces.

Bond investors, however, focused on cooler inflation data.

Two-year Treasury yields edged up 2 basis points to

4.1493%, after falling 14 bps over the past two days. Ten-year

yields were steady at 4.5593%, 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 100.48,

after falling 0.4% overnight to the lowest since June 18. The

yen hovered at 162.08, 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 0.1% higher at $1.3538, after surging 1%

overnight.

Gold was steady at $4,055 an ounce.

(Editing by Christian Schmollinger)

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