Volkswacht Bodensee - Stocks extend losses tracking AI, Fed and trade

Mid-week comments from Federal Reserve Chair Jerome Powell have cast doubt over another cut to US interest rates in December.

"The main culprit (for Friday's losses) was uncertainty about the future policy of the Federal Reserve," said AJ Bell investment director Russ Mould.

"The negative response to Meta's bloated AI spending also contributed to... selling, although US futures paint a brighter picture off the back of a surge in Amazon's shares," he added.

Investor confidence in artificial intelligence had lifted markets at the start of the week, pushing California-based chip designer Nvidia to become the first $5 trillion firm and sending several stock markets to record highs.

Sentiment was further boosted by a detente in the US-China trade war that has shaken global markets, though momentum faded as the two sides stopped short of producing a signed agreement.

While the Fed on Wednesday cut interest rates as expected, Powell's follow-up comments that another reduction by the end of the year was not guaranteed hit sentiment.

The European Central Bank and Bank of Japan held their rates steady Thursday.

The ECB's stance was reinforced by data Friday showing inflation eased closer to the central bank's two-percent target in October.

European stocks slipped in Friday midday trades, tracking losses on Wall Street, where the Nasdaq closed down 1.6 percent Thursday.

An earnings report released by Apple after US markets closed showed quarterly revenue that beat estimates, powered by iPhone and services revenue.

Amazon also reported earnings that were better than expected, driven by surging demand for its cloud computing services.

In Asia, Tokyo's main benchmark gained more than two percent on Friday while Seoul added half a percent, with both reaching record closes.

Japan's climb came despite a sharp plunge in Nissan shares after the automotive giant said it expected to suffer an operating loss in its current fiscal year ending in March.

Trading in Seoul ended just after an announcement by Nvidia that it will supply 260,000 of its most cutting-edge chips to South Korea.

In Hong Kong, shares of Chinese electric vehicle powerhouse BYD tumbled after results announced on Thursday evening showed a 33 percent year-on-year slump in third-quarter profit.

Hong Kong's main benchmark closed the day down 1.4 percent, while Shanghai finished 0.8 percent lower.

Challenges in the Chinese economy were further highlighted by official data on Friday that showed factory activity shrinking in October for the seventh successive month.

President Xi Jinping and US counterpart Donald Trump struck several key deals during Thursday's meeting that had been anticipated by observers.

Washington agreed to cut some tariffs on Chinese goods, while Beijing committed to keeping supplies of critical rare earths flowing.

Trump and Xi have not yet signed a comprehensive trade agreement, and experts say the meeting amounted to a tentative one-year truce in the trade war between the world's top two economies.

- Key figures at around 1140 GMT -

London - FTSE 100: DOWN 0.3 percent at 9,727.42 points

Paris - CAC 40: DOWN 0.2 percent at 8,142.16

Frankfurt - DAX: DOWN 0.3 at 24,059.15

Tokyo - Nikkei 225: UP 2.1 percent at 52,411.34 (close)

Hong Kong - Hang Seng Index: DOWN 1.4 percent at 25,906.65 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,954.79 (close)

New York - Dow: DOWN 0.2 percent at 47,522.12 (close)

Euro/dollar: DOWN at $1.1559 from $1.1564 on Thursday

Pound/dollar: DOWN at $1.3117 from $1.3142

Dollar/yen: UP at 154.16 yen from 154.06 yen

Euro/pound: UP at 88.15 from 87.98 pence

West Texas Intermediate: DOWN 0.4 percent at $60.33 per barrel

Brent North Sea Crude: DOWN 0.4 percent at $64.11 per barrel

M.Schneider--VB