London (AFP) – Tech firms led a plunge across equity markets Wednesday after a rout on Wall Street, fueled by a collapse in chip titan Nvidia and disappointing data on US factory activity that revived recession fears and pushed the dollar lower. The sight of investors running to the hills sparked memories of the brief but tumultuous sell-off at the start of August, which was partly driven by a significant miss on US jobs creation.
All three leading indexes in New York ended sharply lower Tuesday, with the Nasdaq being the main casualty, diving more than three percent as traders dumped big-name tech firms including Apple, Alphabet, and Amazon. The biggest loser was AI chip leader Nvidia, shedding almost $280 billion of its value amid fears that the surge in firms linked to artificial intelligence may have run too far.
“When risk reduction takes hold, the most crowded trades tend to bear the brunt, and that’s precisely what we saw in Nvidia, which tumbled 9.5 percent as global growth jitters intensified,” noted independent analyst Stephen Innes. Adding to the pain, it emerged after Wall Street closed that US authorities had issued Nvidia and other firms subpoenas as they probe claims of antitrust law violations.
The selling filtered through to Asia, where tech and chip firms took the brunt of the market downturn. Europe, with a smaller number of major tech firms, experienced smaller losses across its main indices. In Japan, Advantest stocks plunged 7.7 percent, and Tokyo Electron fell more than eight percent, while Sony lost three percent. TSMC shed more than five percent in Taipei, with SK hynix dropping eight percent in Seoul and Samsung falling more than three percent.
Tokyo and Taipei each dived more than four percent overall, while Seoul was 3.2 percent lower. Elsewhere, oil prices rebounded slightly after Tuesday’s heavy selling, sparked by demand worries linked to a weak Chinese economy and questions over the US outlook, while OPEC’s consideration of output hikes added to the market pain, analysts noted.
Worries about the US economy resurfaced after figures showed a marginal improvement in factory activity in August, though it remained in contraction for a fifth consecutive month. The figures come days before a closely watched report on non-farm payrolls, which could significantly impact Federal Reserve officials’ decision-making going into next week’s policy meeting. The bank is expected to cut interest rates, but the debate surrounds how large the cut will be, with most anticipating a 25-basis-point reduction. However, a below-forecast reading is seen as boosting the chances of a 50-point move.
– Key figures around 1030 GMT –
London – FTSE 100: DOWN 0.6 percent at 8,248.57 points
Paris – CAC 40: DOWN 0.9 percent at 7,505.94
Frankfurt – DAX: DOWN 0.7 percent at 18,617.28
EURO STOXX 50: DOWN 1.1 percent at 4,859.14
Tokyo – Nikkei 225: DOWN 4.2 percent at 37,047.61 (close)
Hong Kong – Hang Seng Index: DOWN 1.1 percent at 17,457.34 (close)
Shanghai – Composite: DOWN 0.7 percent at 2,784.28 (close)
New York – Dow: DOWN 1.5 percent at 40,936.93 (close)
Dollar/yen: DOWN at 145.11 yen from 145.46 yen on Tuesday
Euro/dollar: UP at $1.1055 from $1.1047
Pound/dollar: UP at $1.3118 from $1.3111
Euro/pound: UP at 84.29 pence from 84.17 pence
Brent North Sea Crude: UP 0.4 percent at $74.02 per barrel
West Texas Intermediate: UP 1.1 percent at $71.09 per barrel
© 2024 AFP
