MORNING BID EUROPE-AI's reality check

A look at the day ahead in European and global markets ​from Tom Westbrook Investors abandoned the chipmakers at ​the vanguard of the AI revolution on ‌Friday, ​with margin calls rippling across Asia and bonds surging as the tech bets that have defined the year in financial markets came spectacularly undone.

The ‌triggerwas concern that Democrats' election sweep could put the brakes on data-centre development, though confidence in the sector had already been shaken by mounting concerns over whether massive AI investments would generate sufficient returns. After Wall Street's steepest ‌wipeout since "Liberation Day," shares in the world's biggest contract chipmaker, TSMC , went limit down at the ‌open in Taipei where the market is set for its largest weekly loss since 1999.

For some in the market, that's a signal the capitulation is over. But besides talk that big local institutions were scooping up shares in Taiwan and South ⁠Korea, ​there were few buyers. Potential ⁠investors in Anthropic's highly anticipated IPO are raising doubts about whether the artificial intelligence startup can proceed with its planned roadshow ⁠next week in time for a November listing, Reuters reported on Thursday, citing people familiar with the discussions.

South Korea's KOSPI ​managed to lift off nine-month lows, with help from authorities who moved to relax margin ⁠rules to ease forced selling. But it was still down by around 5% and a bounce in Nasdaq 100 futures was sketchy and ⁠struggling ​to hold into the Asian afternoon.

Bond markets surged at the short end as investors headed for safety and reassessed whether central banks will really be in the mood for hiking if the construction, ⁠spending and hiring around AI infrastructure were to slow down. The cost of insurance against default at AI ⁠investor SoftBank leapt to ⁠a four-year high in the Asia day and credits across the US tech sector are in focus for signs of pressure or of markets cutting access ‌to debt funding.

Key ‌developments that could influence markets on Friday: US market ​open

(Editing by Shri Navaratnam)