London (AFP) – Stocks fell across the board Thursday, pulled down again by growing worries that hefty AI investments by tech heavyweights may not pay dividends as soon as hoped. Risk aversion also spilled into Bitcoin, which slumped under $70,000 and is now down more than 40 percent from its record high above $126,000 in October.
In Europe, the Bank of England and the European Central Bank both kept benchmark interest rates on hold as expected, as inflation pressures ease. The euro was little changed, but the British pound slid as Prime Minister Keir Starmer fights for his political life due to a storm of protest at his appointment of Peter Mandelson as ambassador to the United States, despite knowing about his close ties to convicted sex offender Jeffrey Epstein.
On equity markets, investor caution remains high after Anthropic, which created the AI chatbot Claude, unveiled a tool that could be used by firms to carry out legal work. Its announcement Tuesday hit firms across the software, financial services, and asset management industries, though analysts noted there had already been a general shift out of tech following years of eye-watering gains. Financial updates from Alphabet, ARM, and Microsoft have fueled that move, as questions are raised about the wisdom of pumping hundreds of billions into artificial intelligence projects with little idea about the timing of returns.
“The market continues to scream: stop spending,” said Swissquote analyst Ipek Ozkardeskaya. Big Tech companies are saying they need to spend more to meet expected AI computing demand, “but at the end of the day, investors have the last word,” she added. Shares in Amazon were down 3.7 percent, Alphabet 2.9 percent, and Microsoft 2.5 percent. Fiona Cincotta, an analyst at City Index, said that “while losses in tech continue, sentiment remains fragile.”
Silver prices tanked nearly 12 percent Thursday as a sell-off in precious metals resumed after a brief spell of calm following massive selling when records were reached last week. Gold, traditionally seen as a safe haven, lost almost two percent. Oil prices dropped more than three percent after Iran and the United States said nuclear talks would go ahead in Oman this week. The news soothed investor concerns sparked by a report Wednesday that the bitter foes would not meet owing to a row about the format and the venue, which sent the price of both main contracts up more than three percent.
Shares in Glencore fell 7.5 percent in London after British-Australian miner Rio Tinto said it was dropping talks to merge with the Swiss resources giant. Shares in Rio Tinto shed 1.2 percent in London.
– Key figures at around 1630 GMT –
New York – Dow: DOWN 1.0 percent at 49,029.04 points
New York – S&P 500: DOWN 0.9 percent at 6,821.81
New York – Nasdaq: DOWN 0.9 percent at 22,690.10
London – FTSE 100: DOWN 0.9 percent at 10,309.22 (close)
Paris – CAC 40: DOWN 0.3 percent at 8,238.17 (close)
Frankfurt – DAX: DOWN 0.5 percent at 24,491.06 (close)
Tokyo – Nikkei 225: DOWN 0.9 percent at 53,818.04 (close)
Hong Kong – Hang Seng Index: UP 0.1 percent at 26,885.24 (close)
Shanghai – Composite: DOWN 0.6 percent at 4,075.92 (close)
Euro/dollar: DOWN at $1.1790 from $1.1802 on Wednesday
Pound/dollar: DOWN at $1.3536 from $1.3648
Dollar/yen: UP at 156.98 yen from 156.92 yen
Euro/pound: UP at 87.10 pence from 86.47 pence
Brent North Sea Crude: DOWN 3.3 percent at $67.16 per barrel
West Texas Intermediate: DOWN 3.4 percent at $62.91 per barrel
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© 2024 AFP
