Huge investment announcements by ChatGPT-maker OpenAI this week boosted tech optimism but there are worries that the AI-fuelled rally may have run too far (SEBASTIEN BOZON) <\/p>\n
Stock markets struggled Friday following a mixed week dominated by the Gaza ceasefire, US government shutdown and fears that the artificial intelligence sector is overvalued.<\/p>\n
After some equity indices hit record highs, along with gold and bitcoin, “the bull run is on pause”, noted Derren Nathan, head of equity research at Hargreaves Lansdown.<\/p>\n
European and Asian stock markets were largely downbeat Friday after\u00a0losses Thursday on Wall Street.<\/p>\n
The dollar traded mixed against main rivals and oil prices slid more than one percent.<\/p>\n
Nathan added that “the great reality check, otherwise known as\u00a0third-quarter earnings season,\u00a0is upon us”.<\/p>\n
Buying sentiment won a boost this week from news that ChatGPT-maker OpenAI had signed multi-billion-dollar chip deals with South Korean titans Samsung and SK hynix as well as US firm AMD.<\/p>\n
The spending added to the hundreds of billions already pumped into the sector as firms look to get ahead on the sphere of artificial intelligence.<\/p>\n
That in turn has seen investors flood into the tech sector, sending stock prices rocketing — with US chip leader Nvidia topping a $4 trillion market capitalisation.<\/p>\n
However, there are rumblings that the rally could run out of steam, causing jitters on trading floors.<\/p>\n
“Some areas of the market appear overheated,” said Keith Lerner at Truist Advisory Services.<\/p>\n
Such worries have been part of the reason behind the rally in gold to a record above $4,000 an ounce Wednesday.<\/p>\n
Alexandra\u00a0Symeonidi, corporate credit analyst at William Blair, wrote: “Given the strong rally in tech stocks some market participants started to question the sustainability of the price momentum and were driving parallels with recent bubbles.<\/p>\n
“So, while the overall market has been healthy, investors have been adding hedges in what is broadly considered to be a safe haven asset.”<\/p>\n
Still, Pepperstone’s Michael Brown remained upbeat on equities and saw plenty of upside.<\/p>\n
“My view remains that dips in the equity complex should still be viewed as buying opportunities, with the ‘path of least resistance’ continuing to lead higher amid resilient underlying economic growth, robust earnings growth, and a looser Fed policy backdrop,” he wrote in a commentary.<\/p>\n
– Key figures at around 1045 GMT –<\/p>\n
London – FTSE 100: DOWN 0.1 percent at 9,500.38 points<\/p>\n
Paris – CAC 40: UP 0.1 percent at 8,045.47<\/p>\n
Frankfurt – DAX: DOWN 0.2 percent\u00a0at 24,571.46<\/p>\n
Tokyo – Nikkei 225: DOWN 1.0 percent at 48,088.80 (close)<\/p>\n
Hong Kong – Hang Seng Index: DOWN 1.7 percent at 26,290.32 (close)<\/p>\n
Shanghai – Composite: DOWN 0.9 percent at 3,897.03 (close)<\/p>\n
New York – Dow: DOWN 0.5\u00a0percent at 46,358.42 (close)<\/p>\n
Euro\/dollar: UP at $1.1575 from $1.1558 on Thursday<\/p>\n
Pound\/dollar: DOWN at $1.3280 from $1.3294<\/p>\n
Dollar\/yen: DOWN at 152.71 yen from 153.14 yen<\/p>\n
Euro\/pound: UP at 87.17 pence from 86.94 pence<\/p>\n
Brent North Sea Crude: DOWN 1.2 percent at $64.41 per barrel<\/p>\n
West Texas Intermediate: DOWN 1.2 percent at $60.76 per barrel<\/p>\n
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