Global markets struggle after tech sell-off and fears over Chinese economy | Stock markets

Global markets endured another day of choppy trading after a tech selloff fueled Wall Street’s worst day in a month and weak economic data from China showed an unprecedented decline in investment.

The FTSE 100 fell 1.1% in London, closing nearly 100 points lower at 9,698; Major banking stocks fell. Barclays, Lloyds and NatWest fell between 2.7% and 3.6%.

On Wednesday, Britain’s blue-chip index threatened to rise above the 10,000-point milestone for the first time. Meanwhile, sterling fell against the dollar after Chancellor Rachel Reeves abandoned plans to increase income tax rates in the budget.

US markets also came under fresh pressure before pulling back on Friday. The benchmark S&P 500 started the day lower in New York but closed flat, while the Dow Jones industrial average fell 0.7%.

The tech-focused Nasdaq Composite fell as much as 1.8%, but later recovered its losses to climb out of the red and rise to 0.1%.

Markets across Europe also fell at the open; The pan-European Stoxx 600 fell 0.9%.

France’s Cac 40 index is down 0.54% so far, while Germany’s Dax index is down almost 0.9%.

Japan’s tech-heavy Nikkei fell 1.8% on Friday, South Korea’s Kospi fell 2.6% and Australia’s fell 1.5%, following a tumultuous day on Wall Street that saw Nvidia and other tech companies reeling from valuation concerns.

Nvidia, the $4.5 trillion (£3.4 trillion) technology company, led a wider sector decline, falling 3.6%, as investors reassessed the value of businesses in the AI ​​sector after Japan’s SoftBank sold its entire stake in the company.

SoftBank and Chinese mobile phone and computer chipmaker SK Hynix fell more than 6%, while Samsung Electronics fell 4% and Taiwan Semiconductor Manufacturing Company fell 1.8%.

Global markets also reacted to fears of a slowdown in the Chinese economy, following data showing that activity slowed more than expected at the beginning of the last quarter of the year.

According to the Office for National Statistics, figures showed fixed asset investment shrank by 1.7% in the first 10 months; This is a record low.

China’s CSI 300 lost 0.7%, Hong Kong’s Hang Seng lost 0.9% and Taiwan’s Taiex lost 1.4%.

U.S. markets were also on edge due to the impact on the economy of the longest federal government shutdown in history of the world’s largest market.

The shutdown forced the government to suspend the publication of data on inflation and employment.

A growing number of officials have warned about the possibility of a US interest rate cut next month.

Jim Reid, an analyst at Deutsche Bank, said: “It’s certainly been a volatile week in terms of sentiment, with relief at the end of the lockdown competing with concerns about AI valuations and whether the Fed will cut interest rates again after a number of speakers this week struck a more cautious tone.

“The S&P 500 had its worst day in more than a month, with the probability of a December rate cut dropping sharply from 59% on Wednesday to 49% last night.”

Kyle Rodda, senior financial market analyst at Capital.com, said: “The weakness in Asian markets was not as deep as what was happening on Wall Street. It makes sense. There is more sentiment in US valuations and the focus of the sell-off is a combination of dialed-back Fed rate cut expectations and the loss of momentum behind AI trading due to fears of inadequate investment returns.”

“However, despite a brief rally in Chinese stocks after weak data, including exceptionally weak investment figures, raised hopes of more stimulus from Chinese authorities, there was still a high degree of stagnation in Asian risk assets.”

Sterling fell nearly 0.5% to $1.31 against the dollar, and 30-year bonds rose 12 basis points in the UK bond market as investors weighed the potential impact of Reeves’ U-turn on raising income taxes in the budget on November 26.