Business
Global Markets | European shares stumble at end of best month since June on AI worries
European shares dropped on Friday, hammered by a global tech selloff that shaved billions off the market values of some chip heavyweights, ending a largely strong month on a sour note.The pan-European STOXX 600 index closed 0.36% lower at 646.75 points, despite recording its best month since June.Results from Amazon and Intel in the US rekindled concerns about the high costs of building out AI infrastructure and prompted a pullback from technology names worldwide."The message from investors is becoming clearer: strong AI demand is no longer enough on its own," Daniela Hathorn, senior market analyst at Capital.com, said.The European technology sector index fell 2.75% for its worst day since July 7 and led sectoral declines. AT&S , Soitec and Technoprobe led losses on the STOXX 600, with declines ranging from 9% to 13%.Robust earnings in Europe this quarter have offered some support to stocks, but the drop on Friday shows how quickly bullishness can evaporate if global sentiment shifts."The market is trying to wrestle with the equation. A huge amount of capex is being spent, relative to the timeline of a return on investment. And at the moment, they don't have an answer to that," Michael Hewson, chief analyst at MCH Market Insights, said.Growth Defies HeadwindsSeparately, data showed the euro zone economy grew faster than predicted last quarter, displaying exceptional resilience to headwinds from expensive energy, even as surging borrowing costs and rapid inflation cloud the outlook.Additionally, French consumer prices rose more than expected in October, recording the highest inflation rate since December 2023.Investors are already grappling with political unrest in the euro zone's second-largest economy, at a time when the country faces mounting pressure from elevated government debt, driving French bond yields to multi-year highs.Universal Music Group jumped 7.89%, topping the STOXX 600, after posting a pick-up in subscription streaming revenue in the third quarter. The media sector rose 1.63%.BP rose marginally after posting third-quarter net income ahead of expectations, while German sportswear maker Puma advanced 5.59% after a quarterly sales beat.Sanofi gained 4.71% after the French pharmaceutical firm reported third-quarter results ahead of analyst expectations and lifted its outlook.Among other movers, Bayer gained 5.46% after winning a trial on Thursday over claims by three women that its Roundup weedkiller caused their cancer.
Economic Times·5 hours ago·2 min read
Business
Tech rout drives gold to one-year low, white metals sink deep into oversold zone
Gold prices hit a one-year low on Friday while silver, platinum and palladium slid deep into technically oversold territory, as tech shares slumped amid worries that AI spending may not deliver sufficient returns.Spot gold fell 3.5% to $3,880.97 an ounce by 2:13 p.m. ET (1813 GMT) - its lowest level since October 2025 - while silver dropped 6.5% to $49, breaking below $50 for the first time in 11 months, and palladium slid below $1,000.US gold futures for December delivery settled 3.3% lower at $3,898.90 per ounce."The sky is falling," said independent metals trader Tai Wong. "Metals will not be able to escape the gravity well of a nasty stock correction. Earnings have been the foundation of the AI rally and now that pillar is showing some cracks."Friday's sharp fall in technology stocks may have led to forced selling of safe-haven assets, such as gold, and margin calls, analysts at Commerzbank said in a note, adding that they expected a recovery in precious metals ahead.Gold is down 30% since hitting a record high of $5,595 in January due to bets on interest rates staying higher for longer and is currently under pressure from muted demand in Asia. Analysts, however, say central bank demand tends to strengthen whenever gold is below $4,000.Meanwhile, the three white precious metals - silver, platinum and palladium - lack the support that gold has received in recent years from purchases by central banks and safe-haven investment demand.This week's 7% to 9% fall in silver, platinum and palladium, compared with a 2.9% decline in gold, took their Relative Strength Index deeply into the "oversold" zone for the first time in three years, signalling the strength of current bearish momentum."What is particularly troublesome for the white metals is that the downturn has been grinding and relentless rather than a sharp spike that is quickly recovered," Wong said.Silver was increasingly viewed as an industrial growth-dependent commodity. HSBC said industrial and jewellery demand for silver was falling, and it expects an average silver price of $64 per ounce in 2027, down from its average forecast of $71 for silver this year.To buy a single ounce of gold, one currently needs 79 ounces of silver , the most in 11 months, compared with 46 ounces in January, when silver hit a record high of $122.From a historical perspective, silver still has room to fall further vs gold: this ratio, according to consultancy Metals Focus, averaged 82 in 2020 to 2025.Platinum and palladium touched their lowest levels in 13 and 17 months respectively, with palladium slipping below $1,000 an ounce and the gold-platinum ratio climbing to 2.7, the highest since mid-2025.Platinum was last down 4.2% at $1,425.02, while palladium lost 3% to $976.08 under pressure from worries about auto sector demand.
Economic Times·5 hours ago·2 min read
