Semiconductor sell-off hits South Korea
The accelerating correction in the semiconductor sector briefly triggered sell-side circuit breakers in South Korea today, extending what has already been an exceptionally volatile year for the country's equity market. Index heavyweights Samsung Electronics and SK Hynix came under intense selling pressure as reports that Meta may sell excess AI computing capacity fuelled concerns over a potential shift in semiconductor demand dynamics, weighing heavily on chipmakers' share prices.
The DAX is expected to remain largely insulated from these developments, however, given its relatively limited exposure to technology stocks. Only Infineon is likely to attract closer attention, although its shares are trading broadly stable ahead of the opening. Even so, investor sentiment across the semiconductor sector remains highly nervous amid elevated valuations.
Cyclicals return to favour
Over recent sessions, investors have increasingly rotated back into cyclical sectors, with BASF, BMW, Mercedes-Benz and Volkswagen attracting renewed buying interest. Hopes of a gradual stabilisation in the German economy, combined with easing energy prices, are improving the outlook for economically sensitive industries. Similar rotation strategies have emerged several times in recent years; the key question now is whether Germany has finally reached a genuine cyclical turning point.
US jobs report in focus
Attention today will centre on the US non-farm payrolls report, which has been brought forward because Wall Street will be closed tomorrow for the Independence Day holiday. Investors will also closely monitor US factory orders for further indications of economic momentum. From a technical perspective, the DAX is expected to trade within a range of 24,800 to 25,150 points during today's session.
