Reported by Nicolás Lopez Medina
European stock markets have closed lower, dragged down by the sharp global correction in technology and semiconductors. The Ibex 35 fell by around 0.3%, whilst the Euro Stoxx 50 dropped by 1.3%, with ASML and other stocks linked to artificial intelligence among the main sources of pressure.
In Asia, the session was clearly bearish, with widespread declines driven by technology stocks.
In the United States, Wall Street was trading sharply lower at the close of European markets. The Nasdaq fell by more than 1.7% and the S&P 500 by around 1.3%, weighed down by profit-taking in AI-related companies.
The main catalyst for the session was the widespread sell-off in technology stocks. After months of strong gains, investors have begun to take profits on stocks most closely linked to artificial intelligence amid concerns over valuations, spending on data centres and possible further interest rate rises in the US.
In Spain, ACS led the Ibex’s losses due to its exposure to data centre infrastructure, whilst defensive stocks performed relatively better. The index held up better than other European markets due to its lower weighting in technology stocks.
In Europe, ASML, BE Semiconductor, ASM International, STMicroelectronics and Infineon suffered the sharpest falls.
The fall in oil prices continues to ease inflationary risks. Brent crude has remained close to $77 per barrel after diplomatic progress between the US and Iran eased fears of an immediate supply disruption via the Strait of Hormuz.
Fixed income has acted as a safe-haven asset amid heavy selling in equities. The fall in oil prices has also helped to reduce some of the expectations of energy-related inflation, although the market remains focused on the Fed’s hawkish stance and comments from Kevin Warsh.
The yield on the 10-year German Bund stood at around 2.92 per cent, down by approximately 3 basis points. In Spain, the yield on the 10-year government bond fell to 3.39 per cent, also down by around 3 basis points.
In the United States, the yield on the 10-year Treasury fell by around 3 basis points to 4.48%.
Gold and silver fell to $4,136 and $62 respectively.
The EUR/USD exchange rate closed below the 1.14 mark for the first time in over a year.
