London (AFP) – US and European stock markets recovered Friday following a tech stocks rout triggered by growing unease about the billions being spent on artificial intelligence. Oil prices jumped higher after the United States announced new sanctions to curb Iran’s oil exports moments after the adversaries wrapped up a day of indirect talks in Oman.
The recent tech selloff has hit other risk assets, with bitcoin falling further and wiping out all the gains built up since Donald Trump’s US presidential election win. The digital currency had plunged near $60,000 before paring losses, and has shed nearly half its value since touching a record high above $126,000 in October.
Wall Street’s main equity indices pushed higher on Friday, with the blue-chip Dow setting a fresh all-time high and the tech-heavy Nasdaq Composite climbing 1.5 percent. “After Thursday’s rout, another recovery is on the cards for markets today,” said XTB research director Kathleen Brooks.
However, not all tech stocks were bouncing back. Shares in Amazon dived 7.7 percent after the computing and retail titan reported strong sales but significantly boosted tech-spending estimates after markets closed on Thursday. “It’s been a week from hell for tech stocks as AI spending plans caused upset across global markets,” said Russ Mould, investment director at AJ Bell. Shares in Google’s parent company Alphabet were also lower, as were shares in Facebook’s parent company Meta.
Enthusiasm about AI has helped propel tech stocks higher and equity markets to record highs, but investors have recently begun questioning the wisdom of pumping vast sums into the technology with little clarity on the timing of returns. Sentiment had already been rattled after Anthropic — which created the Claude chatbot — unveiled this week a model that could replace numerous software tools, including for legal work and data marketing.
After steep losses Thursday, European markets all pushed higher. “For Europe, this period has highlighted the relative safety of assets aligned with the real economy rather than technology,” said Joshua Mahony, chief market analyst at Scope Markets. Meanwhile, Asian markets turned in mixed performances. Seoul — which had led the region’s January rally thanks to its heavy tech weighting — ended 1.4 percent lower as it tracked losses on Wall Street.
In company news, shares in Jeep maker Stellantis plunged over 24 percent in Paris after warning of a 22-billion-euro ($26-billion) write-down due to misjudging the shift in demand to electric vehicles. Stellantis shares are now down around 80 percent over the past two years. Meanwhile, shares in British-Australian mining giant Rio Tinto finished flat in Sydney after it dropped merger talks with Swiss resources firm Glencore. The deal would have created the world’s biggest mining firm, worth about $260 billion. Rio Tinto’s London-listed stock edged 0.3 percent higher on Friday, while Glencore climbed 1.5 percent, clawing back some of the previous day’s losses.
Toyota jumped two percent in Tokyo after hiking profit and sales forecasts for the current fiscal year despite the impact of US tariffs.
– Key figures at around 1630 GMT –
New York – Dow: UP 1.8 percent at 49,778.29 points
New York – S&P 500: UP 1.4 percent at 6,894.91
New York – Nasdaq Composite: UP 1.5 percent at 22,883.16
London – FTSE 100: UP 0.6 percent at 10,369.75 (close)
Paris – CAC 40: UP 0.4 percent at 8,273.84 (close)
Frankfurt – DAX: UP 0.9 percent at 24,721.46 (close)
Tokyo – Nikkei 225: UP 0.8 percent at 54,253.68 (close)
Hong Kong – Hang Seng Index: DOWN 1.2 percent at 26,559.95 (close)
Shanghai – Composite: DOWN 0.3 percent at 4,065.58 (close)
Euro/dollar: UP at $1.1814 from $1.1784 on Thursday
Pound/dollar: UP at $1.3607 from $1.3541
Dollar/yen: DOWN at 157.00 yen from 157.02 yen
Euro/pound: DOWN at 86.84 pence from 87.02 pence
West Texas Intermediate: UP 1.3 percent at $64.14 per barrel
Brent North Sea Crude: UP 1.5 percent at $68.53 per barrel
© 2024 AFP
