Stock markets around the world plummeted yesterday night and this morning in response to giant chipmaker Intel's surprise warning of lower-than-expected earnings, announced yesterday.
Markets from Japan to Hungary to Ireland--and technology stocks especially--dropped on the news of the chip giant's setback.
Korea and Hong Kong markets both fell sharply after Intel's announcement, with 6.5 percent and 4.8 percent drops, respectively, but other Asian markets weren't affected as severely.
In Japan this morning, the share prices of most major chip makers and other high-technology issues were weak, and the Tokyo market's benchmark average stumbled down 1.45 percent. Analysts, however, said the falls would be limited.
"Considering Japanese semiconductor makers' future fundamentals, it is unlikely their share prices will fall sharply further," said Yukihiko Shimada, a senior analyst at Wako Research Institute.
Taiwan's market fell 5.5 percent over its last three sessions since Monday, but its index, fueled by prospects of an Asian economic recovery and a robust local economy, still remains 19 percent higher than its January 12 level.
In most European countries, markets slid 1 percent to 2 percent today. Dutch shares were down 2 percent; the Irish Stock Index anticipated a drop of several percentage points; the Hungarian Bourse was seen falling 2 percent to 3 percent; Frankfurt shed 1.6 percent; Oslo's Total share index dipped 1.3 percent; and London's market slid 1.7 percent.
Though markets, as a whole, may have been able to absorb today's shock waves and ultimately stabilize, individual technology stocks across the world suffered a more direct punch.
Analysts said today that the heat high technology stocks have taken since Intel's announcement was an overreaction. Nevertheless, some of Europe's high technology bellwethers took a pounding.
In Paris, chip maker SGS-Thomson Microelectronics fell more than 5 percent, while French software company Cap Gemini lost over 6 percent. Cap Gemini had announced a share issue just before Intel's news.
In Frankfurt, German technology giant Siemens AG slid 3 percent. In Stockholm, shares in Swedish telecommunications group Ericsson, and Finland's mobile phone maker Nokia fell 2.5 percent and 4 percent, respectively. In Taiwan, microchip giant Taiwan Semiconductor dropped 5 percent.
Other tech firms, however, said they could possibly cash in on Intel's downside. Poland's largest computer maker, Optimus, said today that it would not be affected by Intel's warning of lower first-quarter profits.
"Intel for us is a very important partner...but what can be bad for them can be good for us because a lowering of processor prices would mean we could offer lower prices at the same margins, or even bigger [margins], while demand on the market is growing," Optimus president Roman Kluska told Reuters.
Despite those optimistic words, Optimus shares were flat today, as shares in other Polish companies faltered. Prokom Software, for example, dipped 2.5 percent, while software firm ComputerLand fell 3.9 percent. The overall market in Poland tumbled 3.2 percent.
Reuters contributed to this report.