Volkswacht Bodensee - Tech sell-off deepens as US inflation sparks AI jitters

European stock markets were more resilient, benefiting from their lower exposure to the tech sector, as well as falling oil prices and government bond yields.

Seoul and Tokyo bore the brunt of the selling as traders bailed out of chipmakers, tracking sharp losses on Wall Street.

"The tech sell-off has continued with pace, exacerbated by US inflation data which increased expectations for US interest rate hikes this month," said Dan Coatsworth, head of markets at AJ Bell.

"US Treasury bond yields fell, suggesting that investors are moving into supposed lower-risk assets," he added.

Markets, already struggling with concerns about the outlook for the AI investment boom, were stung after data showed the US consumer price index jumped more than expected to 3.7 percent in September.

The inflation figures put pressure on the Fed to raise rates at least once more following September's hike, with the bank's decision due on October 28, a week before the US midterm elections.

Tech firms rely heavily on borrowing to fund their huge AI investments, meaning they are particularly sensitive to higher interest rates.

In Europe, stock markets in London and Paris rose while Frankfurt fell.

Saxo UK investor strategist Neil Wilson pointed to "worries about the AI buildout, bubbly valuations, lower-than-expected earnings growth at leading US frontier labs, Chinese competition" as additional factors behind the tech selling.

Seoul's Kospi dived more than eight percent -- leading to a brief trading halt -- before slightly paring the losses, with semiconductor firm SK hynix sinking more than 11 percent and Samsung more than nine percent.

Tokyo shed close to five percent, driven by sharp falls for Advantest, Kioxia and investment titan SoftBank.

Taipei lost more than three percent as market heavyweight TSMC gave up two percent even after it announced a sixth straight run of record quarterly profit, fuelled by demand for AI hardware.

- Key figures at around 1115 GMT -

London - FTSE 100: UP 0.5 percent at 10,783.94 points

Paris - CAC 40: UP 0.2 percent at 7,885.01

Frankfurt - DAX: DOWN 0.5 percent at 25,177.04

Seoul - Kospi: DOWN 7.6 percent to 5,554.22 (close)

Tokyo - Nikkei 225: DOWN 4.9 percent to 64,425.95 (close)

Hong Kong - Hang Seng Index: DOWN 1.0 percent at 24,062.72 (close)

Shanghai - Composite: DOWN 1.6 percent at 3,707.48 (close)

New York - Dow: DOWN 0.1 percent at 51,621.48 (close)

Brent North Sea crude: DOWN 1.3 percent at $104.63 per barrel

West Texas Intermediate: UP 0.1 percent at $95.19 per barrel

Euro/dollar: UP at $1.1218 from $1.1147 on Wednesday

Pound/dollar: UP at $1.3259 from $1.3189

Dollar/yen: DOWN at 157.82 yen from 158.37 yen

Euro/pound: UP at 84.64 pence from 84.57 pence

dan-ajb/js

P.Keller--VB