Source: Sharecast
The pan-regional Stoxx 600 index, France’s CAC 40 and Germany’s DAX all closed down 0.1%, at 635.00, 7,827.63 and 25,251.15, respectively, reversing earlier gains. Meanwhile, Brent crude was down 0.8% at $105.81 a barrel and West Texas Intermediate was 0.2% higher at $93.94.
The International Monetary Fund lifted its global growth forecast slightly for 2026 on the back of artificial intelligence investment but said wars and higher energy prices would weigh on progress.
In its latest World Economic Outlook, the IMF forecast global growth of 3.1% in 2026, up from 3%, and 3.4% in 2027 compared with an April forecast of 3.2%.
The IMF raised its outlook for several major advanced economies, including the UK, Germany and Spain, while downgrading France.
In Asia, investors were growing increasingly concerned about rising competition from Chinese memory-chip maker ChangXin Memory Technologies and the sustainability of the sector's elevated margins.
Sentiment was further hit by concerns over elevated bond yields, which have raised questions over the economics of the vast spending programmes underpinning the AI boom. Analysts said investors were becoming less willing to pay premium valuations for future growth as financing costs remain high.
"The sell-off drama has been concentrated in Asia, with South Korea’s Kospi plunging by around 6% and Japan’s Nikkei falling by more than 2% as semiconductor stocks sold off," said Wealth Club analyst Susannah Streeter.
"With further interest rate rises a possibility, there are also fresh niggles of worry about the huge costs of staying ahead. Tech giants are borrowing billions to fund research and develop new models, and retail investors are also leveraging their bets through loans, which have been helping to support valuations to some extent."
In equity news, tech stocks were all under pressure after the Asian selloff with Infineon, STMicro, ASM, BE Semiconductor and Nokia all lower.
Givaudan shares surged as the Swiss flavours and fragrances group posted a better-than-expected third-quarter update.
LVMH nudged lower as the luxury group posted weaker-than-expected third-quarter sales, as weak demand in China hit sales of its Louis Vuitton and Dior brands.