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Global markets fall after tech sell-off and fears over Chinese economy

about 6 hours ago
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Global markets have fallen after a tech sell-off that fuelled Wall Street’s worst day in a month and weak economic data from China showed an unprecedented slump in investment.The FTSE 100 fell by 1.1% on opening, losing about 100 points, as bellwether banking stocks tumbled.Barclays, Lloyds and NatWest slumped by between 3% and 3.5%.

The fall left the blue-chip FTSE 100 at 9,705.On Wednesday, the index had threatened to break through the landmark 10,000-point mark for the first time.Meanwhile, the pound fell against the dollar after the chancellor, Rachel Reeves, abandoned plans to raise income tax rates in the budget.Markets across Europe also fell on opening, with the pan-European Stoxx 600 falling 0.9%.

France’s Cac 40 has so far fallen 0,54%, while Germany’s Dax dropped by almost 0,9%,Japan’s tech-heavy Nikkei fell 1,8% on Friday, South Korea’s Kospi plunged 2.

6% and there was a 1,5% fall in Australia, after a torrid day on Wall Street as Nvidia and other tech companies tumbled over valuation concerns,Nvidia, the $4,5tn (£3,4tn) tech company, led a wider sector decline, falling 3.

6% as investors reassessed the value of businesses involved in the AI sector after Japan’s SoftBank sold its entire stake in the company.SoftBank and SK Hynix, a Chinese chipmaker for mobiles and computers, fell more than 6%, Samsung Electronics dropped 4% and Taiwan Semiconductor Manufacturing Company dropped 1.8%.Global markets also reacted to fears of a slowdown in the Chinese economy after data showed that activity cooled more than expected at the start of the final quarter of the year.Figures showed that fixed-asset investment shrank 1.

7% in the first 10 months, a record decline, according to the National Bureau of Statistics.China’s CSI 300 fell 0.7%, while Hong Kong’s Hang Seng dropped 0.9% and Taiwan’s Taiex slumped by 1.4%.

US markets were also jittery over the impact on the economy of the world’s largest market over the longest federal government shutdown in history.The shutdown has forced the government to put the release of data on inflation and jobs on hold.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionA growing number of officials have also signalled caution over the prospects of a US 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 over the end of the shutdown vying with concerns over AI valuations and whether the Fed will cut rates again after several speakers have struck a more cautious tone this week.“The S&P 500 posted its worst day in over a month with a December cut probability falling sharply from about 59% at Wednesday’s close to 49% last night.

”Kyle Rodda, a senior financial market analyst at Capital.com, said: “The weakness in Asian markets wasn’t quite as profound as what was experienced on Wall Street.It stands to reason.There’s more air in US valuations and the locus of the sell-off is a combination of dialled back Fed rate cut expectations and a loss of momentum behind the AI trade amid fears of inadequate return on investment.“But there was still a high degree of sluggishness in Asian risk assets, notwithstanding a brief pop in Chinese stocks after underwhelming data, including extraordinarily weak investment figures, raised hopes of more stimulus from Chinese authorities.

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