Fears that the Democratic party’s blue wave in this week’s US midterm elections will sink the AI investment boom are roiling markets, after heavy losses on Wall Street last night.
Asia Pacific markets are a sea of red as investors ditch tech stocks after more than $3.2tn was wiped off the US stock market yesterday.
South Korea’s Kospi was down 6.51% at the close.
In Taiwan, the benchmark Taiex stock index plunged a record 3,737.67 points in early trading. It closed down 1,791 points, or 4.6%.
Japan’s Nikkei share average has posted its worst week in more than six years.
For the week, the benchmark was down 9.3%, its worst weekly decline since March 2020 during the Covid pandemic.
Europe has joined the global sell-off.
The FTSE 100 index, which tracks blue-chip shares listed in London, has dropped by 166 points, or more than 1.5%, at the start of trading to 10,615 points. Most of the hundred stocks on the index are down.
The pharmaceuticals company AstraZeneca (-2.8%) is the top faller on the FTSE 100.
Other fallers include IAG (-1.5%), which owns British Airways, after it missed profit forecasts and warned this morning that its annual capacity would be slightly lower than a year earlier.
Germany’s Dax index is down 1.5%, France’s Cac 40 has dropped by 1.2% at the open, Spain’s Ibex is down 1.1%.
After months of warnings that AI valuations were too high, and that the bubble might burst, US investors dashed to the exits en masse yesterday. The Nasdaq tech index slumped by 5.5%, while the Dow Jones industrial average dropped 1,833.06 points, or 3.44%, and the S&P 500 lost 4.36%.
Memory chip makers, who had been profiting from the AI boom, led the fallers – SanDisk slumped 22% and Micron and AMD lost 17% of their value.
The chip company Nvidia led the fallers on the DJIA, down more than 9%.
Today’s key events
• 9am GMT: UN’s FAO food price index
• 1.30pm GMT: US non-farm payrolls jobs report
• 3pm GMT: University of Michigan’s US consumer confidence report
We’ll be tracking all the main events throughout the day on our business live blog …
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