By B.V. Phani Kumar
- Global technology shares remained under pressure as investors reassessed the huge spending behind artificial intelligence. The Nasdaq had fallen about 10 per cent from its recent peak after three weeks of selling. Market watchers warned that a prolonged technology slump could weaken global growth and, in some major economies, raise recession risks.
- Crude oil prices fell sharply at the start of the week. Brent crude declined nearly 3 per cent to about $110 a barrel, while US WTI crude dropped to around $101 a barrel. The fall came as diplomatic contacts involving Iran and Qatar raised hopes of easing tensions and reopening the Strait of Hormuz.
- The possibility of a diplomatic settlement over Iran changed the tone in energy markets. The US administration indicated a preference for negotiations rather than an immediate return to military action. Still, attacks on oil tankers in the Gulf kept supply risks alive and prevented a full return of confidence.
- Iran indicated that it could reopen the Strait of Hormuz, a route carrying close to a fifth of global energy supplies. Talks with Qatari mediators were reported to be continuing. Any reopening would be a major relief for Asian economies dependent on Gulf oil and liquefied natural gas.
- US equity futures recovered modestly after a difficult October for Wall Street. S&P 500 futures rose about 0.4 per cent and Nasdaq futures gained about 0.8 per cent. Investors were waiting for Apple’s quarterly results to judge whether technology demand and AI-related spending remained sustainable.
- Intel’s nearly 29 per cent plunge at the end of the previous week deepened concern over semiconductor valuations. The fall highlighted worries that heavy investment in chips and data centres may not produce matching earnings. Semiconductor companies across Asia and Europe were expected to remain volatile.
- Asian markets opened mixed. Japan’s Nikkei 225 was marginally lower, while South Korea’s Kospi gained about 1.4 per cent. The broader Asia-Pacific index outside Japan slipped slightly as investors balanced cheaper oil against technology-sector uncertainty.
- European markets showed relative resilience. The EURO STOXX 50 rose about 0.3 per cent, while German DAX futures were slightly higher. European government bonds attracted safe-haven demand, with the spread between German and French bonds returning to around 164 basis points.
- The United States prepared for midterm elections, which became a major near-term driver for the dollar and global markets. Investors watched for clues on control of Congress and the possible direction of US fiscal, trade and energy policy. A divided outcome could limit major policy changes but increase legislative uncertainty.
- The US Federal Reserve’s policy outlook remained a central market theme. Markets assigned roughly a 72 per cent probability to a 25-basis-point rate increase in December. Traders were also awaiting US manufacturing data and the monthly jobs report for confirmation of the economy’s direction.
- Concerns over AI capital expenditure intensified. One global brokerage estimated that spending by major cloud companies could nearly double to $800 billion this year and rise further to $1.2 trillion in 2027. Investors questioned whether revenue and profit growth could justify such a scale of investment.
- Earnings expectations for large US companies were cooling. Growth in S&P 500 profits was projected to slow from nearly 30 per cent in 2026 to about 18 per cent next year. This added to worries that equity valuations, especially in technology, had run ahead of fundamentals.
- The global growth picture showed signs of weakening. Analysts pointed to softer activity indicators and the risk that a technology-led equity correction could affect household wealth, business investment and credit conditions. Energy prices remained an additional source of inflation pressure.
- Gold continued to be watched as a hedge amid geopolitical uncertainty. Elevated Middle East tensions, oil-market volatility and uncertainty over US interest rates kept demand for safe assets alive. Investors were also tracking the dollar, which influences gold prices and emerging-market currencies.
- The US-Israel-Iran conflict remained a key geopolitical risk. While diplomatic signals improved, military capability and regional attacks continued to shape market behaviour. Shipping, insurance and energy supply chains remained exposed to any renewed escalation.
- India-US relations remained prominent in global political discussion, with trade, energy, defence, technology and immigration identified as major areas of engagement. Senior US officials were reported to be focusing on the strategic importance of the relationship. The issue carried implications for supply chains, technology partnerships and regional security.
- The World Bank’s assessment of India’s growth outlook drew attention globally. India’s growth forecast was reported to have been raised, reinforcing its position as one of the faster-growing major economies. This supported the view that India could remain a relative outperformer if global conditions worsen.
- Global investors continued to assess whether capital would move from crowded technology trades towards emerging markets. India was seen as a possible beneficiary of diversification, but foreign portfolio flows remained sensitive to oil prices, currency stability and US bond yields.
- Climate and disaster risks remained visible in global coverage. Severe weather, including Cyclone Murasu’s approach towards the south Andhra coast, showed how extreme weather continued to disrupt lives, infrastructure and economic activity across South Asia.
- The broader global message was one of caution: easing oil prices offered relief, but technology valuations, geopolitical risk and uncertain interest-rate paths kept markets nervous.
