It is 5:00 a.m. in New York City. Good morning. Chipmakers under pressure, dragging stock futures lower. Saudi Arabia intercepts fresh Houthi attacks. President Trump says he looks at joining Saudi-backed strikes. Bloomberg New Economy Forum in full swing in India. An all-star lineup throughout the day, live from New Delhi. The global chip selloff continues. Let's get a read on markets around the world with Winnie Hsu.
Good morning. A pretty brutal selloff that we see in Asia, and especially the Korean stocks. The benchmark Kospi was down as much as 7% earlier today before paring some of its losses to be closing down at 5.5% lower. The biggest drag: the memory chipmakers. SK Hynix down more than 7%, and that is coming after the losses we saw in U.S. chipmakers overnight, plus comments from the Broadcom CEO saying that going forward the key bottleneck of the AI trade will likely be in funding instead of memory chips. There's also concerns around the competition from the Chinese rival CXMT, given that they are making progress when it comes to this new memory architecture that both of these Korean chipmakers are actually working on for years.
You take a look at how that is spilling over to the broader Asian market, the MSCI Asia down 1.3%. Japan and Taiwan both down about 2%. All eyes on the Japanese yen, which is strengthening by 0.4% today. We just had those headlines crossing the terminal just now saying the Bank of Japan is leaning against a back-to-back rate hike this month, saying they don't see a high likelihood of a sharp increase in the upside inflation risk. Plus, they want more time to assess the economic data. We did see the yen fluctuating against the 158 level against the dollar. The possibility of a rate hike is a bit higher when it comes to the December possibility.
The yen seems pretty stable for now. Let's go to London for a look at the European session with Justina Lee.
Good morning. It is looking like a better day in Europe, probably thanks to lower tech weighting. We are seeing the Stoxx 600 up nearly 0.6% thanks to gains from a lot of the proxy bond sectors like real estate and utilities. The worst-performing sector is still tech, led by chipmakers, and for a lot of the reasons that Winnie was talking about, such as ASML. We flip the board and look at the fixed income side of things. We have seen a pause in the gain of oil, and we have seen that has been a reprieve for European bond yields in general. Today, we are seeing some dollar weakness that is lifting the euro up nearly 0.3%.
Thank you. Comments from Intel also setting a chill through the market, but not quite so much as it did in Korea, and not quite taking our cues from Korea. Nasdaq 100 futures are pointing lower, but S&P futures are deciding which way to go, and Russell 2000 futures firmly in the positive. The chipmaker selloff does continue. We are seeing a little bit of a safe haven trade as we look at Treasuries, particularly the 10-year yield down about five basis points, but we are seeing declines across the board: four basis points at the long end and two basis points at the front end. We are seeing a little bit of consolidation on oil as well. Brent crude is still up, and heating oil futures are off just a few cents. Not a massive amount of relief from the diesel deal with Russia. It really only means one-sixth of Russia's normal exports will be coming back to market, so it is not like it will make a massive difference. They have not quite come to market yet, so even though credit spreads are narrowing, we are not seeing a massive amount of difference. I did want to point out that Bank of America has a new poll out showing that investors are more exposed to tech than they have been at any time since just after the pandemic. Let's get some individual premarket movers with Alex Morgan.
Good morning. Micron, Nvidia and AMD — we start the Asia session with the continuing pressure on semiconductors, on chips, closing down around 5%. Keep your eyes on these names today. We have the comments from the Broadcom CEO comparing market sentiment to a casino gambler, so that is a colorful element in the memory trade today. Let's flip it over to Bumble, some matchmaking for the dating app, on the news that the Wall Street Journal reported they could be looking at going private for about $1 billion. Let's finish on Stellantis, some planned outages in North America, particularly some of the Jeep models, and we want to keep an eye on that today.
That is Alex Morgan. Coming up, the Infosys co-founder and chairman joins us for an exclusive conversation. Later, we will push ahead to the earnings season starting with the banks, that is starting with Seema Shah. Let's get straight to Shery Ahn at the New Economy Forum in New Delhi with the exclusive interview. Shery?
Great to come to you from New Delhi for the New Economy Forum, the eighth edition happening. It is around the theme of the new global world order, where we are seeing more competition in an era where we are seeing artificial intelligence disrupt so much. I am here with the Infosys chairman and co-founder. Thank you so much for joining us. You helped build the IT services industry here in India — what was it, 1981, with six other colleagues?
So much is changing now, and AI could threaten the whole business model. How are you seeing the changes now, and what does Infosys do next?
I think in the last 45 years we have been there. This is the biggest transformation happening in the industry because AI is changing everything. AI coding is becoming very popular. It is also creating new opportunities because AI-led transformation of business is the biggest story for the next decade. That requires a lot of systems and people to make that happen. I believe while coding may become less of an issue, business transformation with AI will be a big opportunity for companies like Infosys.
You are partnering with Anthropic's Claude as well?
It is a very efficient way of enabling companies with multiple legacy systems and using multiple tools to have complete control over their own infrastructure. That has been very popular.
You are model-agnostic when it comes to orchestrating, as you have called it, this age of change for enterprises that you consult for. In that case, what sort of models do you prefer? Smaller models, frontier big companies?
In any situation, you have a combination of models. With some extreme high requirements, we will use frontier models. For the middle, we use open-source models, and for the rest, small models using your data. You mix and match all of these things based on the need. Orchestration is bringing all these different things together to create an effective solution.
Turning that into actual revenue — the fact that enterprises can actually feel that AI is helping them. What are they telling you?
They are saying AI is making business far more complicated than they thought. They have done an initial pilot, now it's about scaling it up. Unless you fundamentally reimagine and transform your business, you will not get the productivity benefits people talk about. People are realizing they have to go back and really reimagine what it takes to use AI capabilities — putting guardrails so there are no rogue agents. A lot of requirements on how to do AI properly.
Do you see other Indian businesses being able to survive the disruption of artificial intelligence the way you are talking about it?
I am sure they will. Everybody will execute their own plan, but if they are able to change their whole business model and build new AI services, transform their workforce, reimagine with AI, they will do it.
It is not just about Infosys or Indian tech services. You helped build the digital infrastructure of this country, the system on which UPI was based, which revolutionized the payment services system. Do you see anything that can be that revolutionary coming?
Next is AI diffusion. We think its real impact on society is if it is widely used. We use the same lessons learned now to roll out AI at scale for the country, for areas like education, agriculture and language.
What are the risks of fast artificial intelligence adoption?
We have to look at other chatbots, the risks like hallucination, where they give you fake answers. And with agents, it is agents going rogue. The important thing is responsible AI, guardrails to make sure AI works. That is part of doing it properly. We have a whole team for responsible AI. Infosys has it.
I was going to ask about the safeguards for the country, especially when you have UPI — putting another layer of AI, the risks around that.
I think that's a good point, but having learned from these large implementations, I think we have an idea of how to design things in a way that they have proper guardrails, so the whole population feels it should be trustable. It is having the right guardrails, which I think we will do.
What do you think about job losses?
Job losses could happen for large organizations, but India is dense with small companies. If you make them successful, they will hire people. Small businesses hiring two or three people — and that is how jobs will get created. There are no set roles in a small company.
You basically do everybody's job.
That is where the future is.
At the same time, SMEs don't have that much capital to put into transformation.
Many things we do in India: access to capital, markets, know-how, compliance rules, infrastructure to make small companies more effective.
This is my first time in India, and I am loving New Delhi. At the same time, there have been a lot of security concerns around protests, a lot of discontent among the youth. How do you view this social change that is happening?
India is facing an issue like the rest of the world, which is how do you create jobs for millions of young people? Of course, give them the proper education, which is why I think you need to really boost entrepreneurship. Only by creating millions of small companies and startups will they create the jobs. India is doing that, by the way. Ten years ago, there were only 1,000 small company startups. Today, 150,000 startups. By 2035, we will have one million startups.
It is all about merit, meritocracy. You are working on a report when it comes to the exams. What can you tell us, and where are you looking for guidelines and lessons on how you form that report?
The report is not out, but we are trying to provide a roadmap on how to make exam papers dynamically generated with AI before the exam.
You are incorporating AI into the examination system.
Yes, checked by human beings. Also, how do you have a network of locations where people can do it safely and securely if you want to do them online?
I went to college in South Korea, so this is a country where education is so important. When you have these exams for college, the markets open later. Are there any sort of guidelines you can find from international, like international standardized tests?
We look at the global standard — China, Korea. We look at how the American system works. We look at all these things. Finally, we found a solution that works for Indians.
