US markets are also nervous due to the impact of the longest federal government shutdown in US history.Photograph: Spencer Platt/Getty Images
Global markets have fallen after a tech sell-off fueled Wall Street’s worst day in a month and weak economic data from China showed an unprecedented drop in investment.
US markets came under fresh pressure on Friday, when the technology-focused Nasdaq Composite fell as much as 1.8% in New York before retreating. The benchmark S&P 500 index fell 0.7%, while the Dow Jones Industrial Average fell 1%.
The FTSE 100 fell 1.4% in London, losing around 100 points, as leading banking shares slumped. Barclays, Lloyds and NatWest fell between 3% and 3.5%.
The fall left the blue-chip FTSE 100 at 9,705. On Wednesday, the index threatened to surpass the historical mark of 10,000 points for the first time. Meanwhile, the pound fell against the dollar after the chancellor, Rachel Reeves, abandoned plans to increase income tax rates in the budget.
Markets across Europe also fell at the open, with the pan-European Stoxx 600 falling 0.9%.
The French Cac 40 has so far fallen 0.54%, while the German Dax has lost almost 0.9%.
Japan’s tech-heavy Nikkei fell 1.8% on Friday, South Korea’s Kospi tumbled 2.6% and there was a 1.5% drop in Australia, after a torrid day on Wall Street when Nvidia and other tech companies fell on concerns about their valuation.
Nvidia, the $4.5tn (£3.4tn) technology company, led a broader sector decline, falling 3.6% as investors reassessed the value of companies involved in the AI ​​sector after Japan’s SoftBank sold its entire stake in the company.
Related: US markets struggle amid technology sell-offs and economic uncertainty
SoftBank and SK Hynix, a Chinese maker of mobile and computer chips, fell more than 6%, Samsung Electronics fell 4% and Taiwan Semiconductor Manufacturing Company fell 1.8%.
Global markets also reacted to fears of a slowdown in the Chinese economy after data showed activity cooled more than expected at the start of the final quarter of the year.
Figures showed fixed asset investment fell 1.7% in the first 10 months, a record drop, according to the National Statistics Office.
China’s CSI 300 fell 0.7%, while Hong Kong’s Hang Seng fell 0.9% and Taiwan’s Taiex plunged 1.4%.
U.S. markets were also nervous about the impact on the economy of the world’s largest market during the longest federal government shutdown in history.
The shutdown has forced the government to suspend the publication of data on inflation and employment.
A growing number of officials have also expressed caution about the prospects for a U.S. rate cut next month.
Deutsche Bank analyst Jim Reid said: “It has certainly been a volatile week in terms of sentiment, with relief at the end of lockdown competing with concerns over AI valuations and whether the Federal Reserve will cut rates again after several speakers have taken a more cautious tone this week.