Global markets are experiencing a sharp sell-off in technology shares, with investors spooked by climbing US inflation. The price of goods leaving American factories jumped to 3.7%, raising the prospect that the US Federal Reserve could raise interest rates as soon as the end of this month. Chip stocks have been hit hardest, with South Korea's KOSPI index falling over 8%, Samsung Electronics dropping 9% and SK Hynix losing 10.5%. Japan's Nikkei 225 has slid 4.5%. On Wall Street, the S&P 500 index fell 1.1% on Wednesday while the Nasdaq Composite tumbled 1.9%, including an 11% plunge in Dell's shares amid worries that spending on artificial intelligence may not justify the scale of investment.
Chris Weston, an analyst at brokerage Pepperstone, said the spread of inflation across the US economy has shaken confidence in markets. He noted that traders were hoping for signs the inflation crisis was fading, but instead are seeing widespread price pressures. The concerns will weigh on policymakers gathering for the IMF's Annual Meeting in Bangkok.
Meanwhile, the UK economy is expected to have contracted slightly in August after a strong July, with official figures due at 7am today. Analysts predict a fall of 0.1% for the month.