European and Asian stock markets experienced a downturn on Thursday as concerns over the future growth of major tech firms triggered a global market sell-off.
The pan-European Stoxx 600 decreased by 1.3%, reaching its lowest point since May, due to significant declines in several key companies including Dutch chipmaker ASML (down 2.75%), Germany’s Infineon Technologies (5.5% drop) and Switzerland's STMicroelectronics (a notable 12.8% fall).
The selling began overnight in the US, where the Nasdaq, which focuses on tech companies, saw a decline of 3.6%, its most significant decrease since 2022. The Nasdaq 100 index lost approximately $1tn (£776bn) in value as investors expressed caution over previously soaring AI-related stocks such as Nvidia, Tesla and Alphabet Inc., the parent company of Google.
Shares declined for several prominent companies within this group: Nvidia saw a 7% decrease, while shares of Alphabet dropped by 5%, Microsoft fell by 3.5%, Apple lost ground at 3%, and Meta Platforms (formerly known as Facebook), which was led by its CEO Mark Zuckerberg, experienced a decline of 5.6%.
Tesla Inc., under the leadership of its founder Elon Musk, reported its largest loss since 2020 at -12% following a reported profit drop of 45%, along with delayed unveiling plans for self-driving and humanoid robot technology. Despite previous enthusiasm surrounding these innovations, investors grew skeptical as Tesla's sales growth slowed down.
The downturn continued in Asia, where tech companies also witnessed a decrease, including South Korean electronics giant Samsung (down 2%) and Japanese technology firm Sony (down by 5%). Japan's Nikkei index closed lower by 3%.
Despite the market decline, Dan Coatsworth from AJ Bell noted that it may be an appropriate correction in view of recent highs and significant movements for large companies.
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