Stock markets slid on Friday after computer systems crashed around the world. Sentiment was also affected by uncertainty about the US election and concerns about the Chinese economy.
The London Stock Exchange experienced a delay in trading due to the outage, which was the result of a faulty anti-virus update. Airports, airlines, trains, banks, shops and even doctor’s appointments were also affected.
Later, the calculation of the London blue-chip index FTSE 100 was frozen for part of the afternoon, as was the main index of the Milan Stock Exchange, which is part of the LSE. Stock trading was not affected.
“A global IT outage has led to risk aversion,” said Axel Rudolph, senior market analyst at online trading platform IG.
The crash was caused by an update to the CrowdStrike antivirus software on Microsoft’s cloud computing service.
Shares of CrowdStrike, which has already released a software fix, fell 11.1 percent, while Microsoft lost 0.7 percent.
Wall Street’s major stock indices attempted an uptrend in morning trading, but quickly fell into the red and remained there for the rest of the day.
The S&P 500 closed down 0.7 percent.
“The market was extremely overbought, so it was only a matter of time before there was a pullback,” said Tom Cahill of Ventura Wealth Management.
European stocks closed lower across the board, as did most Asian markets.
Oil prices also fell sharply as analysts expressed concerns about China’s economic outlook.
Aviation authorities in the United States grounded all aircraft for a short time, and airlines elsewhere canceled flights or delayed them because systems running Microsoft Windows crashed.
“The fact that the world has come to a standstill because of a global IT breakdown shows the dark side of technology and that relying on computers does not always make life easier,” noted Dan Coatsworth, investment analyst at stockbroker AJ Bell.
The markets had experienced a strong upswing after representatives of the US Federal Reserve made it clear in recent days that they were ready to cut interest rates.
Analysts had interpreted the decline in technology stocks earlier this week as a sign of a shift to other undervalued areas of the market. But the losses on Thursday and Friday were quite broad.
“It appeared that investors preferred to take some profits rather than increase their exposure following the week-long rotation from the technology sector to the value sector,” said David Morrison, senior market analyst at Trade Nation.
There is also growing uncertainty about who will run against Donald Trump in the US elections in November, as doubts about President Joe Biden’s health are fuelling calls for him to step down.
– Key figures around 2030 GMT –
New York – Dow: 0.9 percent down at 40,287.53 (closing price)
New York – S&P 500: 0.7 minus points to 5,505.00 (closing price)
New York – Nasdaq Composite: 0.8 percent less to 17,726.94 (closing price)
London – FTSE 100: 0.6 percent less to 8,155.72 (closing price)
Paris – CAC 40: 0.7 percent less to 7,534.52 (closing price)
Frankfurt – DAX: Minus 1.0 percent to 18,171.93 (closing price)
EURO STOXX 50: 0.9 percent less to 4,827.24 (closing price)
Tokyo – Nikkei 225: 0.2 percent less to 40,063.79 (closing price)
Hong Kong – Hang Seng Index: down 2.0 percent to 17,417.68 (closing price)
Shanghai – Composite: Increase of 0.2 percent to 2,982.31 (closing price)
Euro/Dollar: Down to 1.0885 USD from 1.0897 USD on Thursday
Pound/Dollar: Down to $1.2914 from $1.2944
Dollar/Yen: Rise to 157.47 from 157.37 Yen
Euro/pound: Up to 84.27 pence to 84.18 pence
West Texas Intermediate: Down 3.2 percent to USD 80.13 per barrel
Brent North Sea oil: down 2.9 percent to USD 82.63 per barrel
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