Global Stock Markets Plunge Amid Tech Selloff and Valuation Concerns

Global stock markets faced significant declines as tech shares drove volatility to levels not seen since April. Concerns over high valuations and potential corrections emerged, as leaders from major financial institutions expressed skepticism. Safe-haven assets like gold and government bonds saw gains, reflecting market anxiety.

Global stock markets experienced notable drops on Wednesday, largely driven by a selloff in technology shares. This market turbulence was most pronounced in Asia, where Japan's Nikkei plummeted nearly 7% from recent highs, and South Korean equities dropped up to 6.2%, only partly recovering later. European tech, the worst-performing sector, dragged down the STOXX 600 and pushed Germany's DAX down 0.3%, while the Amsterdam AEX index slightly dipped.

In the U.S., futures hinted at further declines following a 1.2% decrease in the S&P 500. Market experts are concerned that recent record highs may be overextended, with financial heavyweights like Morgan Stanley and Goldman Sachs questioning existing valuations. Despite these fears, economic factors such as falling interest rates and sustained growth seemingly continue to support equities.

Warnings of a potential significant correction in U.S. markets echo past experiences of market surges, paralleled by the current enthusiasm in generative AI. Safe-haven assets saw increases, with gold rising 0.85% and U.S. Treasury yields holding steady. Bitcoin experienced volatility but regained some ground. Currency markets remained relatively stable, with minor movements in the dollar, euro, and pound.

(With inputs from agencies.)