European shares fell to a one-month low Tuesday, sparked by worries about an overvalued tech sector and diminishing prospects of an imminent interest rate cut from the US Federal Reserve.
The pan-European Stoxx 600 fell 1.8 per cent to 561.62 points to register its worst day since August.
DUBLIN
The Iseq All-Share index slid 2.4 per cent to 11,874.97. Banking stocks were out of sorts, with AIB sliding 3.8 per cent to €8.14 and Bank of Ireland dropping 3.1 per cent to €14.89.
Insurer FBD declined by 2.1 per cent to €14.10.
RM Block
Kenmare Resources fell 3.9 per cent to €2.98 as the titanium minerals miner pulled back its full-year production target. Kingspan fell 3.1 per cent.
LONDON
The blue-chip FTSE 100 closed 1.3 per cent lower in a widespread sell-off, losing for the fourth consecutive session and marking its worst performance since April 9th, when markets worldwide were rattled by US president, Donald Trump’s tariff announcements.
Banking shares led the downturn for a second straight day, falling 2.8 per cent as Barclays, HSBC and Standard Chartered dropped between 2.2 per cent and 3.4 per cent, weighing heavily on the FTSE 100.
However, Dublin-based, but London-listed convenience food producer Greencore jumped 6.3 per cent after reporting full-year adjusted operating profit of £125.7 (€142.7 million) up from £97.5 million the previous year.
Industrial miners also faced pressure, with Anglo American leading declines at 2.6 per cent, as copper prices fell for a third straight session.
Travel and leisure stocks shed 1.5 per cent, mirroring weakness across European counterparts amid escalating geopolitical tensions between China and Japan.
Online supermarket and technology group Ocado’s shares slumped 17.4 per cent to the lowest since 2013, after US partner Kroger said it would close three automated warehouses in January.
EUROPE
Big regional bourses such as Germany’s Dax and France’s Cac 40 fell 1.8 per cent and 1.9 per cent, respectively.
“Higher volatility means higher anxiety throughout the market” reflecting “doubts regarding AI valuations, what the Fed might do next, and the uncertainty around the US economic data and around the long-term borrowing costs”, said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.
On the pan-European Stoxx 600, shares in AI equipment makers dipped. Siemens Energy lost 6.4 per cent and Schneider Electric fell 2.4 per cent, while ABB’s shares dropped 4.1 per cent after the company reaffirmed its top-line growth forecasts, disappointing investors.
Nvidia, with its dominance in AI chips, has become the bellwether for the trend which has sparked gains in tech and infrastructure stocks across the globe. However, the worry is that the AI rally has made related sectors overvalued.
Auto stocks lost 2.9 per cent, with Stellantis falling 4.4 per cent. Miners declined 2.6 per cent, while tech stocks lost 1.8 per cent.
NEW YORK
Wall Street’s main indices were lower in early afternoon trading on concerns over lofty equity valuations and dimming prospects of a December interest rate cut, while investors awaited Nvidia’s earnings and key government data due later this week.
Most heavyweight tech stocks were under pressure. Nvidia’s quarterly results, due after markets close on Wednesday, are seen as a litmus test for the AI-driven rally that has pushed markets to record highs this year. The AI chip giant’s shares were down.
Alphabet chief executive Sundar Pichai told the BBC in an interview on Tuesday that no company would be unscathed if the AI boom collapses.
On the earnings front, Home Depot lost ground after the home improvement chain forecast a bigger drop in full-year profit. Big-box retailers Walmart and Target are also set to report this week, with their results expected to provide insights into the health of the American consumer.
Concerns over high valuations and dwindling expectations of a December rate cut have led to a pullback in US stocks, with the S&P 500 down about 4 per cent from its October peak. – Additional reporting, Reuters
