Easily triggered large-scale profit-taking<\/p>\n
Mark Lister, investment director at Craigs Investment Partners, said it was always going to be a quiet week following all the excitement of the Reserve Bank meeting, the Budget and market heavyweights reporting their latest financial results.<\/p>\n
In the US, the first crack in the recent surge of semiconductor stocks appeared when Broadcom fell 12.59% to US$418.91 ($714.17) after providing what analysts described as a conservative earnings outlook.<\/p>\n
Broadcom, whose share price had risen 40% year-to-date, lost US$280 billion in market value when it forecast US$16b in AI chip revenue in the third quarter, below the estimates of US$17.2b, and kept its guidance of US$100b unchanged for the 2027 financial year.<\/p>\n
Fellow chipmaker Micron Technology was down 7.74% to US$996. The Philadelphia Semiconductor Index dropped more than 6%.<\/p>\n
Commentators said that any management statements that were merely in line, rather than beating expectations, easily triggered large-scale profit-taking. Was it a sign of lingering softness in parts of the AI chip market?<\/p>\n
The scepticism spread offshore with Taiwan Semiconductor Manufacturing Co down 0.84%, and in South Korea, Samsung had declined 4.69%, and SK Hynix had fallen 7.88% at 5.45pm NZ time.<\/p>\n
Those stocks have heavy weightings in their home indices, and the South Korean Kospi was down 4.39%, and the Taiwanese Taiex was down 1.33%.<\/p>\n
Lister said that when a high-flying sector like semiconductors is in vogue, the bar is set very high, and the market expects even stronger results. It can just as easily move into reverse very fast.<\/p>\n
The semiconductor softness didn\u2019t worry the Dow Jones Industrial Average, which charged to a new high after gaining 874 points, or 1.73%, to 51,561.93, with 21 of its 30 stocks rising.<\/p>\n
The tech-driven Nasdaq Composite was steady at 26,830.96, and the S&P 500 was up 0.41% to 7584.31.<\/p>\n
Local stocks<\/p>\n
There was little in the way of big movements on the local market \u2013 except Ebos Group rebounding 61c or 3.13% to $20.11.<\/p>\n
Market leader Fisher & Paykel Healthcare was up 34c to $37.18; Mainfreight collected 70c to $63.21; Spark recovered 3c to $1.87; and Goodman NZ added 5c or 2.49% to $2.06.<\/p>\n
NZME increased 3c or 2.68% to $1.15; Pacific Edge was up 2c or 7.14% to 30c; and Scott Technology gained 5c or 2% to $2.55.<\/p>\n
Vulcan Steel was down 14c or 2.3% to $5.95 \u2013 it was as high as $9.14 in early October 2024 \u2013 Vista Group decreased 5c or 2.2% to $2.22, and Ryman Healthcare shed 4c or 1.75% to $2.25.<\/p>\n
Takeover target Tourism Holdings declined 8c, or 3.14%, to $2.47, well below the $3.10 per share bid.<\/p>\n
Serko was down 4c or 2.56% to $1.52; Synlait Milk shed 2c or 4.6% to 41.5c; Radius Residential Care fell 1.5c or 3.75% to 38.5c; and South Port NZ decreased 20c or 2.23% to $8.75.<\/p>\n
Infratil was up 22c to $15.42 after completing a $200m bookbuild of capital bonds, including $50m in oversubscriptions, maturing on June 15, 2057, with an initial interest rate of 5.5% per annum.<\/p>\n