15th Oct 2026 06:59
(Alliance News) - Stocks in London are set to open lower on Thursday, after stocks in New York and Asia struggled after a hotter-than-expected US inflation reading, while chip stocks came under pressure again as Chinese competition grows in strength.
IG says futures indicate the FTSE 100 to open 20.9 points lower, 0.2%, at 10,703.96 on Thursday. The index of London large-caps closed up 74.53 points, 0.7%, at 10,724.86 on Wednesday.
In the US on Wednesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.1%, the S&P 500 down 1.1% and the Nasdaq Composite down 1.9%.
In Tokyo, the Nikkei 225 plunged 4.4%, while in China, the Shanghai Composite shed 2.4%. The Hang Seng Index was down 1.3%, while the S&P/ASX 200 in Sydney was more resilient, losing only 0.1%.
SPI Asset Management analyst Stephen Innes commented: "The handoff from Wall Street was extremely brittle, but parts of Asia have taken the move and made it considerably uglier because the region sits so close to the heart of the global memory and semiconductor complex."
At the heart of the sell-off is progress by CXMT, which manufactures dynamic random-access memory, found in laptops, smartphones and tablets.
Among the stocks worst hit, SK Hynix slumped 11% in Seoul, while Samsung Electronics shed 9.6%. In Tokyo, Softbank Group fell 8.6%, while Murata Manufacturing plunged 8.4%.
"CXMT's plan to unveil a server-memory product using a new chip structure by year-end has landed at exactly the wrong moment for Korean memory stocks. The issue is not that the global hierarchy has suddenly been overturned overnight. It is that technological progress from a Chinese competitor makes an already nervous market a little less comfortable about assuming the current leaders can simply extend their advantage without interruption," Innes commented.
"That is enough to create problems when positioning is crowded and the market has already started questioning valuation. This is where memory gets awkward. It has been one of the biggest beneficiaries of the AI buildout, but it also carries a history that investors have learned not to ignore. Every few years, the industry reminds everybody that strong demand and tight supply do not automatically make the cycle permanent. When a competitor starts making technological progress at the same time the market is already wobbling, even solid fundamentals can struggle to hold the line."
Sterling traded at USD1.3238 early Thursday, up from USD1.3152 at the time of the London equities close on Wednesday. Against the euro, it fell to EUR1.1801 from EUR1.1826.
The euro bought USD1.1214, up from USD1.1121. Against the yen, the dollar faded to JPY157.93 from JPY158.86.
Analysts at Rabobank commented: "US Treasury yields spiked in response to the data and led to a repricing in the OIS curve, which was implying close to a 50% chance of a hike at the October meeting, up from just 23% the day prior. However, yields retraced throughout the day, and market-implied Fed expectations are back to around a 37% chance of a hike on October 28.
"But the slew of Fed speakers on the schedule yesterday did not hold back when it came to expressing their concerns about the US inflationary path, with [Austan] Goolsbee saying that inflation has been 'discouraging' and highlighting his concerns about overheating, with [Tom] Barkin echoing his concerns. But [Michelle] Bowman, who has held her ground as the only remaining dove on the FOMC (at least, according to Bloomberg's Fed Spectrometer), maintained that she doesn't see an urgency to act on rates."
Bowman serves on the Fed's Board of Governors, Barkin is the Richmond Fed president, while Goolsbee is the Chicago Fed president.
Figures released Wednesday by the Bureau of Labor Statistics showed the US consumer price index rose 3.7% year-on-year in September, accelerating from 3.4% in August, topping the 3.6% FXStreet-cited consensus.
Thursday's global economic calendar has a gross domestic product report in the UK and producer price inflation numbers in the US.
According to consensus cited by FXStreet, the UK data is expected to show the economy shrank 0.1% on-month in August.
Thursday's local corporate calendar has trading statements from miner Antofagasta, home furnishings and furniture retailer Dunelm and building materials company Travis Perkins.
A barrel of Brent fell to USD104.66 from USD105.67 at the time of the London equities close on Wednesday. Gold rose to USD4,141,72 from USD4,089.77.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2026 Alliance News Ltd. All Rights Reserved.