The key facts

  • Kospi fell 3.7%, Nikkei 1.3%, on the selloff of chip giants SK hynix, Samsung and Kioxia
  • WTI rose more than 5% to $109.08, Brent to $111.30 per barrel
  • The spread between French and German 10-year bond yields hit its highest level since January 2012

Selloff amid AI doubts

Global stock markets declined on Tuesday, with technology companies leading the fall amid growing concerns about the investment boom in artificial intelligence — on the eve of key earnings reports from the sector. According to AJ Bell investment director Russ Mould, the recovery of tech stocks on Wall Street the day before did not carry over to Asian markets, where AI companies again came under pressure. Since the June record highs, traders have been doubting inflated valuations and when — and whether at all — the colossal corporate spending on the AI race will pay off. Additional concern is raised by the debt levels of some firms against the backdrop of rising interest rates worldwide.

Google Cloud outage and declines in Asia

Before the Wall Street open, Google reported serious network outages in 'several' cloud services at its European data center in London, affecting primarily British banks. Seoul's Kospi plunged 3.7% to 5,552.74 points: SK hynix lost 4.2%, Samsung 3%, and Elice, a company working in data center infrastructure, crashed more than 30% on its trading debut. The Nikkei 225 in Tokyo fell 1.3% to 64,075.52: Kioxia dropped more than 4%, SoftBank 6%. Hong Kong's Hang Seng lost 1.3%, while Shanghai, by contrast, gained 0.1%.

Oil rises, Europe under pressure

Oil rose sharply on growing concerns about supply disruptions ahead of winter in the northern hemisphere. WTI rose 5.2% to $109.08 per barrel, Brent by 1.6% to $111.30. Mould noted that prices returned above $110 — a high since May — partly due to Ukrainian attacks on Russian refineries. European indices closed lower: the FTSE 100 by 0.6%, the CAC 40 and DAX by 0.8% each. The euro held around $1.1209, remaining under pressure: stormy protests over the cost of living are taking place in France and Italy, pushing up government bond yields. The yield on French 10-year bonds reached 4.94%, exceeding comparable German ones by more than 150 basis points — the widest spread since January 2012, when the eurozone was experiencing a debt crisis.

Earnings outlook

Market attention is focused on the results of the technology sector: this week US giants Meta and Tesla are due to report their figures. In the US, the Dow closed down 0.1% at 51,966.03 points.