A look at the day ahead in European and global markets from Ankur Banerjee
This week's tech share sell-off gained momentum after a report that the United States was considering tighter curbs on chip exports to China, adding to comments on Taiwan by Donald Trump that stirred geopolitical concerns over the sector.
The dour mood looks set to prevail during European hours.
The technology index for pan-European STOXX 600 will once again be centre stage after clocking its biggest one-day percentage drop since December 2022 on Wednesday, mainly dragged lower by ASML (AS:ASML).
Chip investors have been wary of Washington's more protective stance in recent years towards the U.S. semiconductor manufacturing industry, which U.S. political leaders view as strategically important for competing against China.
Bloomberg news reported on Wednesday that the U.S. had told allies it is considering using the most severe trade curbs available if companies continue giving China access to advanced semiconductor technology.
That, along with Republican presidential candidate Trump saying Taiwan should pay the U.S. for its defence, has triggered a sharp dive in chip stocks that has wiped away more than $500 billion in market value.
Chip stocks had fuelled this year's global share rally, taking the Nasdaq and S&P 500 to record highs, and some analysts attribute the recent moves to investors adjusting their positions.
In Asia, the focus will be on TSMC, which is due to report earnings later on Thursday. Its shares have lost more than 6% over two days.
Meanwhile, the European Central Bank policy meeting will take the spotlight later in the day when the central bank is expected to stand pat on rates, with a focus on comments by officials that may offer clues on the next rate cut.
Those comments will likely sway the euro, which touched a four-month high on Wednesday as traders fully priced in a 25 basis-point rate cut by the Federal Reserve in September, after comments from officials.
The yen was choppy after hitting its highest in six weeks on Thursday, with traders still spooked by suspected intervention by Tokyo last week that Bank of Japan data suggests could have totalled nearly 6 trillion yen ($38.4 billion). Official data on the spending is expected at the end of the month.
Key developments that could influence markets on Thursday:
Economic events: ECB meeting, UK wage data, UK Gfk July consumer confidence data
($1 = 156.3900 yen)
(By Ankur Banerjee; Editing by Edmund Klamann)