London (AFP) – Technology share prices clawed back Monday some of last week’s sharp losses, though gains were tempered by a probe into Nvidia boss Jensen Huang over claims of an affair with an alleged Chinese spy. Chipmakers and other companies linked to the artificial intelligence boom took a hammering in the days after last Tuesday’s US midterms, which saw Democrats sweep both chambers of Congress, leading to speculation lawmakers will seek to rein in tech firms.
Europe’s main stock markets rose in late morning deals following gains across much of Asia. The dollar fell versus main rivals, while oil prices dropped. “A fragile recovery in (stock) markets was seen across Asia and Europe on Monday,” noted AJ Bell investment director Russ Mould. “However, with a potential espionage scandal at Nvidia in the background, US futures were pointing to a mixed start when trading gets underway later with the tech-focused Nasdaq index going back into reverse.”
The news that Nvidia’s board was launching an investigation into whether Huang had been targeted in a foreign espionage plot following his admission he was unfaithful to his wife launched fresh uncertainty in the markets. The New York Times last month reported that US intelligence officials concluded a Chinese executive linked to a Singapore-based data centre company called Megaspeed had been funnelling information to Beijing. The executive, Alice Huang — also known as Huang Le, and no relation to 63-year-old Taiwanese-born Jensen — developed a close relationship with the Nvidia boss, the Times said.
In a message to company employees released to media on Sunday, Huang acknowledged having an affair and apologised to his family and company staff. Nvidia is a global leader in producing chips used to train and run AI models and one of the world’s most valuable companies, and last year became the first to reach a market capitalisation of $5 trillion. Technology analyst Dan Ives, at investment bank Yorkville Ives, said the crisis will at the very least spark multiple congressional inquiries and “create an overhang on the stock for a myriad of reasons.”
“This will add risk to the stock as he is so important to the Nvidia story and strategy globally,” Ives added. “This will also increase major scrutiny regarding selling chips to China, which remains a key battleground issue in DC.” China on Monday said the claims that it had spied on Huang were “baseless”.
The results of the US elections last week suggested voters were angry about the US-Iran war, together with US President Donald Trump’s tariffs assault and the huge data-centre buildout across the United States. That has led to speculation the new Congress will seek to slow the tech firms’ construction drive, which could put thousands of jobs at risk. There are concerns also about the hundreds of billions of dollars pumped into the AI sector without companies yet realising profits.
But the carnage across equity markets seen late last week evaporated Monday.
– Key figures at around 1045 GMT –
London – FTSE 100: UP 0.6 percent at 10,739.40 points
Paris – CAC 40: UP 0.4 percent at 8,167.39
Frankfurt – DAX: UP 0.8 percent at 26,013.78
Tokyo – Nikkei 225: UP 2.3 percent at 58,775.50 (close)
Seoul – Kospi: DOWN 0.8 percent at 5,018.85 (close)
Hong Kong – Hang Seng Index: DOWN 0.1 percent at 24,448.95 (close)
Shanghai – Composite: UP 0.3 percent at 3,660.79 (close)
New York – Dow: DOWN 0.5 percent at 51,285.73 (close)
Brent North Sea crude: DOWN 1.3 percent at $97.05 per barrel
West Texas Intermediate: DOWN 1.0 percent at $89.97 per barrel
Euro/dollar: UP at $1.1194 from $1.1138 on Friday
Pound/dollar: UP at $1.3421 from $1.3350
Dollar/yen: DOWN at 157.97 from 158.46 yen
Euro/pound: DOWN at 83.40 from 83.43 pence
© 2024 AFP
