UK stocks fall, with concerns over additional energy price hikes

Asian markets traded lower overnight, extending the tech-led weakness seen in the US after the Nasdaq led losses into the close. Sentiment was further pressured by China’s latest trade data, which showed a 1.1% drop in exports for October, raising questions over the strength of underlying demand. This follows recent signs of front-loading shipments ahead of new US tariffs, suggesting that what had appeared to be resilient momentum may have been temporary. Meanwhile, geopolitical and trade tensions continue to weigh on the outlook despite the recent US-China trade agreement. The US administration’s move to block Nvidia’s B30A chip sales overseas highlights the continued strategic friction in advanced computing, while China’s tightening control over rare earth mining licenses underscores a reversion away from the era of freely open exports of these key materials.

In Europe, the FTSE 100 opened softer, trailing broader regional indices. Domestic data pointed to resilience in the UK housing market, with Halifax reporting that prices hit a new record high in October despite speculation that Labour’s upcoming autumn budget may hit affordability for UK workers. However, the inflation picture remains mixed, with recent cooling of CPI data under pressure as UK energy bills look set to rise again in April. Corporate news also weighed on sentiment, with IAG shares slumping more than 7% after the airline group reported a 2.1% drop in pre-tax profits in Q3 to €1.87bn.

In the US, the government shutdown drags on, with the risk now growing that air travel operations could be disrupted if the impasse extends further. The broader market has been led lower by a pullback in mega-cap tech, with semiconductors particularly under pressure yesterday. Reports that Michael Burry has built short positions in names like Nvidia and Palantir have added to discussions around stretched valuations and whether the tech rally may be nearing a cyclical peak. Yet futures point to a more positive tone today, and with earnings continuing to support the AI narrative and corporate profitability holding firm, many will question whether this week’s weakness represents a dip-buying opportunity rather than the start of a broader reversal. The bull trend may not be over yet, even if concerns of an eventual bubble remain in focus.