FTSE 100 LIVE: Global stock rout deepens as traders remain concerned about AI bubble

The FTSE 100 (^FTSE) slipped below the flatline and European stocks tumbled on Wednesday as the global sell-off in stocks continued. Analysts believe some investors are taking profits, especially in AI-related stocks, after US stock indices hit record highs last week.

The bosses of Goldman Sachs (GS) and Morgan Stanley have both suggested a correction was imminent over the next one or two years. Meanwhile it emerged that Michael Burry, the investor depicted in The Big Short and who bet against the housing market before the global financial crisis, had taken heavy positions against Palantir (PLTR) and Nvidia (NVDA).

Jim Reid, an analyst at Deutsche Bank, said: “Whilst the moves were only one day’s sell-off, the market narrative saw a discernible shift, with a growing chorus discussing whether we might be on the verge of an equity correction.

“That speculation has gathered pace over the last month in particular, mainly because the Magnificent 7 has diverged from the rest of the S&P 500, which has revived questions about how concentrated this equity market now is.”

The so-called Magnificent 7 group of stocks, which includes the likes of Nvidia (NVDA), Microsoft (MSFT) and Tesla (TSLA), has climbed around 45% in the last year alone, thanks to the excitement around AI.

In contrast, the S&P 500 (^GSPC) has risen just 5% over the same period, when stocks on the index are equally weighted.

London’s benchmark index (^FTSE) was only just below the flatline in early trade thanks to its low exposure to tech stocks Germany's DAX (^GDAXI) dipped 0.7% and the CAC (^FCHI) in Paris headed 0.5% into the red The pan-European STOXX 600 (^STOXX) lost 0.6% Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all lower. The pound was around 0.1% up against the US dollar (GBPUSD=X) at 1.3034

FTSE Index - Delayed Quote•USD

(^FTSE)

Follow View Quote Details

9,722.63

+7.67

+(0.08%)

As of 8:51:17 AM GMT. Market Open. Advanced Chart

Follow along for live updates throughout the day:LIVE2 updates

16 mins ago

LaToya Harding

Asia and US overnight

Shares in energy and tech giant SoftBank Group sank 9.8pc on jitters over its investments in artificial intelligence. Computer chip maker Tokyo Electron dropped 4.1pc, while stock in Advantest, a maker of semiconductor testing equipment, lost 7.2pc.

Stocks in Asia mostly tumbled overnight, with the Nikkei (^N225) down 2.5% on the day in Japan, after a retreat on Wall Street spurred by selling of Big Tech shares. The Hang Seng (^HSI) fell 0.1% in Hong Kong and the Shanghai Composite (000001.SS) was 0.2% up by the end of the session, recovering from modest earlier losses.

In South Korea, the Kospi (^KS11) lost 2.9% on the day as Samsung Electronics (005930.KS) shed 4.9%. SK Hynix (000660.KS), which had logged major gains thanks to plans to develop artificial intelligence with chip maker Nvidia (NVDA), lost 1.2%.

Across the pond, US stocks slumped over fears of an artificial intelligence bubble. The S&P 500 (^GSPC) ended 1.2% lower, and the tech-heavy Nasdaq (^IXIC) was down 2%. The Dow Jones (^DJI) lost 0.5%.

Cryptocurrencies, which typically move in lockstep with tech stocks also plunged, with the price of Bitcoin (BTC-USD) falling below $100,000 for the first time since June. It is down more than 20% since its record peak in October.

Weaknesses in the stock market drove investors to buy government bonds. Treasury yields dipped by a few basis points. The rate on 10-year Treasuries was 4.08%.

Meanwhile, higher demand for US debt pushed up the value of the dollar to its strongest level since May.

Nasdaq GIDS - Delayed Quote•USD

(^IXIC)

Follow View Quote Details

23,348.64

-486.09

(-2.04%)

At close: November 4 at 5:15:59 PM EST Advanced Chart 40 mins ago

LaToya Harding

Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what's moving markets and happening across the global economy.

To the day ahead we have data releases from the US including the ISM services index and the ADP’s report of private payrolls for October. Otherwise, we’ll get the final services and composite PMIs from the US and Europe, German factory orders for September.

Central bank speakers include the ECB’s Villeroy, Nagel and Kocher, along with the BoE’s Breeden. Earnings releases include McDonald’s and Qualcomm.

Here's a snapshot of what's on the agenda:

7am: Trading updates: CRH, Marks and Spencer, Weir Group, Barratt Redrow, Metro Bank, Trainline, JD Wetherspoon, Vanquis Banking Group, RS Group, Wizz Air, Hikma Pharmaceutical and Watches of Switzerland 8.15am-8.55am: Spain, Italy, France, Germany PMI final surveys for October 9am: UK New car sales for October 9am: Bank of England Khan speech 9.30am: UK Services and composite PMIs final for October 10am: Eurozone producer prices for September 1.15pm: US ADP Employment for October 3pm: US ISM Services PMI for October

Download the Yahoo Finance app, available for Apple and Android.

View Comments