Global markets fall after tech sell-off and fears over Chinese economy
Global markets suffered another day of volatile trading 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% in London, closing down about 100 points at 9,698, as bellwether banking stocks tumbled. Barclays, Lloyds and NatWest slumped by between 2.7% and 3.6%.
On Wednesday, the UK blue-chip 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.
US markets also came under fresh pressure on Friday, before pulling back. The benchmark S&P 500 started the day lower in New York, but by lunchtime had risen 0.4%, while the Dow Jones industrial average declined 0.8%.
The tech-focused Nasdaq Composite fell by as much as 1.8%, but then recovered its losses to break out of the red and climb 0.7%.
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.
Related: US markets struggle amid tech sell-off and economic uncertainty
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.
A growing number of officials have also signalled caution over the prospects of a US rate cut next month.
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