The UK's FTSE 100 index declined by 0.4% on Thursday, as shares in Asian technology companies plummeted after Broadcom's quarterly earnings missed expectations.
According to Refinitiv, Broadcom's earnings per share (EPS) fell to $7.45, below the expected $7.52. The company's revenue also dropped to $7.23 billion, short of the estimated $7.35 billion.
As a result, shares in companies producing chips and artificial intelligence (AI) technology, widely used in Asia, fell sharply. Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) were among the key movers, with their shares dropping by 5.8% and 6.4% respectively.
Industry analysts have attributed the decline to concerns about the impact of rising inflation and slower economic growth on technology demand. 'This is a clear sign that the tech sector is experiencing a slowdown, which could have far-reaching implications for the global economy,' said a spokesperson for investment firm, Jefferies.
For UK investors and pension holders, the decline in tech stocks may lead to reduced returns on their investments. As technology constitutes a significant portion of the FTSE 100 index, any significant declines could have a broader impact on the market.