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Global stocks dropped on Monday as investors scaled back exposure to risky assets on the first day of a key month for markets.
In Europe, the benchmark Stoxx Europe 600 was off 0.5 per cent and Germany’s Dax dropped 1.4 per cent.
On Wall Street, futures contracts tracking the tech-heavy Nasdaq Composite were 0.7 per cent lower while those for the S&P 500 were 0.6 per cent weaker.
Bitcoin was down more than 5 per cent, taking its drop for the past month to more than 20 per cent.
The risk-off mood on Monday marked a continuation of a wobbly few weeks for financial markets. Big tech stocks, which have again powered the US market higher this year, broke their winning streak in November as investor concerns grew over the valuation of artificial intelligence companies.
Investors are now bracing for a string of US economic data this week, including ISM surveys and ADP payrolls figures, ahead of the Federal Reserve’s decision on interest rates on December 10. Traders are putting the chance of the central bank cutting rates at the meeting at about 90 per cent.
“This week will offer the last real chance to put a December cut from the Federal Reserve into question,” said Francesco Pesole, FX strategist at ING.
In Japan, stocks slid after Bank of Japan governor Kazuo Ueda indicated that the central bank might raise interest rates this month. The blue-chip Nikkei 225 fell 1.9 per cent.
Government bond markets were also weaker on Monday, with the yield on the 10-year US Treasury up 0.03 percentage points at 4.04 per cent. Yields move inversely to prices.
The price of gold rose 0.6 per cent on Monday, trading around $4,255 per troy ounce.
Mohit Kumar, chief European economist at Jefferies, said that while the bank did not believe AI stocks were in a bubble, “we have been rearranging our tech portfolio, positioning for a broadening of the AI rally . . . reducing exposure to high-end chips and adding China tech, software and robotics”.
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