World stocks extend tech rout, silver savaged again

After a valiant start, Europe's main bourses succumbed to the pressures again, as the biggest skid of the year for carmakers - of 2.5% - more than offset a fragile rebound in local tech stocks after their 7% drop in recent days. The other big focus was the pound. It had been under pressure all morning at $1.358 - and 10-year and 30-year gilt yields had hit their highest levels since late November - amid renewed uncertainty around British Prime Minister Keir Starmer's future following the latest revelations about his former U.S. ambassador's ties to the late U.S. sex offender Jeffrey Epstein. Then came the BoE surprise. The central bank kept rates at 3.75% but an unexpectedly close 5-4 vote had traders pricing in a much higher chance of a near-term rate cut, which pushed sterling back under $1.36 and nudged gilt yields lower. "A low inflation forecast has contributed towards easing some members’ concerns about inflation persistence," said Philip Shaw, chief economist at Investec. "Our forecast has been that the MPC (Monetary Policy Committee) would keep rates on hold until the end of April, but we wouldn’t be surprised if that cut is brought forward". The European Central Bank was dull in comparison. It left euro zone rates at 2% and offered no immediate clues about its next move, reinforcing bets of nothing for a while. The euro zone's central bank has been on hold since ending a year-long run of rate cuts in June, and surprisingly resilient growth - coupled with easing price pressures - have taken nearly all pressure off it to provide any further policy support. "The economy remains resilient in a challenging global environment," the ECB said in a statement. "At the same time, the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions."

Wall Street also looked set for another tricky session. Google parent Alphabet had stunned markets on Wednesday with a capex spending plan of as much as $185 billion this year - 55% more than analysts had expected. The news sent its shares down 3% in premarket moves and, combined with a near 12% slump in Qualcomm shares and 6.5% drop in chip designer Arm, looks set to extend a tech selloff that has already wiped out almost $850 billion of market value this month. Craig Inches, head of rates and cash at Royal London Asset Management, said markets were in a delicate position, with stock markets stretched, credit spreads tight, and geopolitics and government debt levels also nagging worries. If equity markets don't start to settle back into their years-long pattern of tech-led gains in the coming months, "will we see the wheels start to come off a bit?" Inches mused. "And what is the reaction of the markets? Do they dive back into the safe havens like sovereign bonds, or has that correlation broken down." Amazon results are also due after U.S. markets close, with investors expected to put its AI spending under the microscope as well.

Precious metals also fell, snapping two days of gains after last week's plunge from record highs. Silver dropped as much as 14% and was still down 12% ahead of U.S. trading at $77.3 an ounce. Gold also fell 2% to $4,888 an ounce and platinum shed over 7%. In the currency markets, the U.S. dollar index was up 0.2% at a two-week high, while the risk-sensitive Australian dollar fell as much as 0.5%. The Japanese yen was looking steadier at 156.60 per dollar. It has fallen for four straight days ahead of a general election on Sunday where polls are pointing to a decisive victory for Prime Minister Sanae Takaichi, endorsing her spending ambitions that have raised concerns about the nation's strained finances. In the Treasuries market, the benchmark 10-year yield rallied 3 basis points to 4.3%. The U.S. non-farm payrolls report for January has been pushed back from Friday to February 11 due to a four-day partial government shutdown that has now ended. Oil prices fell 2% to $68 a barrel after the U.S. and Iran agreed to hold talks in Oman on Friday, while the plunge in bitcoin showed no sign of stopping as it dropped below $70,000 to its lowest since late 2024. "We believe this broader decline is mainly driven by massive withdrawals from institutional ETFs (exchange-traded funds). These funds have seen billions of dollars flow out each month since the October 2025 downturn," Deutsche Bank analysts said in a note to clients.