The FTSE 100 fell again on Tuesday as AI concerns dragged global equities lower amid a continuing selloff that began last week.
London’s leading index was down 0.6% at the time of writing.
Although different geographies are seeing sporadic relief rallies during the recent tech decline, a trend has formed that could put further pressure on technology stocks this week.
“Last night’s tech recovery on Wall Street didn’t carry over into Asian markets with AI-related names in the region facing renewed pressure on their share prices,” said AJ Bell investment director Russ Mould.
“Strikingly, stock in South Korean data centre builder Elice lost a third of its value on its first day of trading with concerns about the sustainability of AI spend ramping up.”
NASDAQ futures were pointing to a lower open when cash markets opened in the US later today.
The absence of major tech in London meant investors focused more on oil prices and the potential near-term ramifications for interest rates.
“European markets endured a sluggish start against this volatile backdrop, with oil prices ticking back above $110 per barrel, the highest level since May, as tensions around Ukraine and the Middle East continue to escalate,” Mould said.
It was a similar setup to yesterday in London, with ‘riskier’ sectors leading the way lower.
Antofagasta was the FTSE 100’s top faller, down 4.5%, as fears mounted that demand for copper would fall if the touted AI slowdown came to pass. However, there is little evidence of this so far.
Rio Tinto was 3% lower.
Polar Capital Technology Trust was another casualty of ongoing AI concerns, with the US tech-heavy trust tracking lower on NASDAQ futures.
Few stocks rose more than 1% on Tuesday. Ithaca Energy was the FTSE 100’s top riser as the group rose in line with oil prices.