Wall Street, FTSE 100 Down on AI Stock Selloffs, Global Risk Aversion

Wall Street, FTSE 100 Down on AI Stock Selloffs, Global Risk Aversion

Wall Street and the FTSE 100 declined as risk aversion dampened sentiment across global equities.  Escalating tensions in the Middle East set the tone for global risk aversion, with overnight US-Iran exchanges weighing on sentiment and driving a broad pullback in equities.

Reports showed that Wall Street closed sharply lower amid profit-taking in the AI space, with disappointing earnings results compounding the risk-off mood.

This left the S&P 500 down 0.74%, the NASDAQ fell 0.89%, and the Dow Jones eased 1.21%, according to a morning brief from First National Bank (FNB).

European markets tracked the downturn, with the FTSE 100 closing 0.40% lower and the Euro Stoxx 50 falling 0.89% as oil prices rose and uncertainty over US-Iran negotiations persisted.

The impact has rippled into Asia on Thursday trading session, where the Hang Seng Index is trading down 1.39%, the Nikkei 225 is off 1.40%, and the ASX 200 gave back 1.19% thus far.

Asian markets are deep in the red this morning, with most global futures also trading lower.

The South African bourse, Johannesburg Sock Exchange (JSE) is likely to come under pressure on Thursday as sentiment has shifted towards the downside amid renewed geopolitical concerns between the United States (US) and Iran once again, FNB said.

Tencent is down 1.93%, presenting a negative read-through for Naspers and Prosus, and the S&P/ASX 300 Metals & Mining Index has dropped 3.27%, which does not bode well for local resource counters.

Gold, silver, and platinum prices are moderately firmer, offering some support to precious metal miners. The JSE trended downward throughout the day on Wednesday and ended the session in negative territory as local investors digested the weaker-than-expected domestic PMI print while ongoing Middle East tensions weighed on sentiment.

Local heavyweights Naspers and Prosus declined 3.8% and 4.37% respectively, providing a drag to the local bourse. By the closing bell, the All Share Index declined 0.89% to 112 987 points and the Top 40 fell 0.96% to 105 239 points.

Industrials (-1.30%) led losses, followed by underperformance in Resources (-0.77%), despite gains from Thungela Resources (3.88%) and Sasol (3.71%). Financials (- 0.58%) continued a decline from the previous session, closing the day at 24 775.50 points. MTN Nigeria Declines by 7% on Significant Volume Action