London markets slipped on Tuesday morning, joining a global sell-off that gathered pace overnight. The FTSE 100 fell 0.9% to 9,619.17, the FTSE 250 dropped 0.8% to 21,926.51, and the AIM All-Share lost 1.0% to 764.21.
European bourses mirrored the negative tone, with the CAC 40 in Paris down 1.2% and Frankfurt’s DAX off 1.4%. In Asia, the Nikkei 225 shed 1.7%, while Hong Kong’s Hang Seng and Shanghai Composite fell 0.8% and 0.4% respectively. The S&P/ASX 200 in Sydney closed 0.9% lower.
Wall Street ended mixed on Monday, but US futures were sharply lower early Tuesday as investors reassessed lofty valuations in the AI sector. Palantir shares tumbled after hours despite topping earnings estimates, amplifying fears that the recent AI rally may have run ahead of itself. The Dow Jones closed down 0.5%, while the S&P 500 edged up 0.2% and the Nasdaq gained 0.5%.
In the UK, Chancellor Rachel Reeves dampened sentiment further after refusing to rule out tax rises in her upcoming November 26 Budget. Speaking from Downing Street, she said she would make the “necessary choices” to close the fiscal gap, with the Office for Budget Responsibility expected to downgrade productivity forecasts, leaving a potential £20 billion shortfall.
BP slipped 0.4% despite reporting a better-than-expected third-quarter profit of $2.21 billion and announcing a new $750 million buyback. Associated British Foods fell 2.2% after confirming a review that could see Primark separated from its food division.
On the FTSE 250, Diversified Energy surged 11% after quarterly EBITDA more than doubled to $286 million, while Domino’s Pizza lost 1.9% despite solid quarterly sales growth. Kore Potash jumped 13% after confirming it had received takeover approaches and launched a formal sale process.