LONDON/SYDNEY, Feb 17 (Reuters) - Global shares were subdued on Tuesday as concerns about a deeper selloff in artificial intelligence and technology heavyweights unsettled investors, while nuclear negotiations between the U.S. and Iran remained in focus.
Futures tracking the Nasdaq 100 in the U.S. slipped 0.9%, suggesting that the unwind may be far from over even after the index logged three consecutive weekly declines. S&P 500 futures also dipped 0.3%.
"The markets are taking each sector one-by-one and stress testing their business models to see how resilient they would be to AI disruption," said Axel Botte, head of market strategy at Ostrum Asset Management.
A monthly Bank of America survey showed global investors were increasingly worried that companies are over-investing.
However, the pan-European STOXX 600 index managed to buck the negative global trend and edged up 0.2%, marking a second consecutive day of gains, while the MSCI all-country index was flat.
"For years, fund managers were selling European assets, which benefited the U.S. That trend is done and is now reversing," Botte added.
UK DATA BOLSTERS RATE CUT HOPES
London's blue-chip FTSE 100 index rose 0.4% as the jobless rate in the UK climbed, fuelling hopes of an interest rate cut next month.
Annual wage growth, excluding bonuses, also slowed to 4.2% in the last three months of 2025 compared with a year earlier.
"The softening labour market has been a key concern for the more dovish members of the Bank of England's Monetary Policy Committee for a while," Rathbones' senior asset allocation analyst Adam Hoyes said.
"But what may be more important for convincing some of their more hawkish colleagues to join them in backing interest rate cuts is the latest slowdown in pay growth."
INVESTORS SCRUTINISE US-IRAN TALKS
With tech stocks wobbling, traders are also closely monitoring geopolitical developments and how they might impact the broader markets.
Washington and Tehran began indirect talks in Geneva on Iran's nuclear programme, even as rhetoric between U.S. President Donald Trump and Iran's Supreme Leader Ayatollah Ali Khamenei turned increasingly heated.
Another round of U.S.-mediated peace talks between Russia and Ukraine also began in Geneva on Tuesday.
Any breakthrough, or failure, in the talks could ripple across the oil markets. Brent futures were last up 0.4% at $68.91 a barrel.
U.S. West Texas Intermediate crude was up 1.8%. This included all of Monday's price action as the contract did not settle that day due to a U.S. holiday.
"The market remains unsettled by geopolitical uncertainties, with investors cautious due to the pending U.S.-Iran and Ukraine negotiations this week," ANZ analysts said.
"If tension in the Middle East eases or meaningful progress is made on the Ukraine war, the risk premium currently built into oil prices could swiftly unwind."
Gold fell 1.3% to $4,927 an ounce, while spot silver was 2.8% lower.
Asian markets were also cautious, with the Nikkei down 0.4% in Japan, where the economy grew an annualised 0.2% in the fourth quarter, far below the 1.6% gain forecast as government spending dragged on activity.
The yen strengthened, leaving the dollar down 0.3% at 153.14 yen. The Japanese currency has gradually picked up after hitting its weakest level in late January since July 2024, as investors fretted that Prime Minister Sanae Takaichi's plans for heavy spending to revive the economy could hurt long-term state finances.
"The market has likely assumed that softer GDP data in the fourth quarter will encourage PM Takaichi's plans to offer additional fiscal support and reduce the sales tax on food," NAB analysts wrote in a research note.
Markets in China, Hong Kong, Singapore, Taiwan and South Korea were closed on Tuesday for Lunar New Year holidays.
The dollar index, which tracks the U.S. currency against six others, rose 0.1%.
(Additional reporting by Scott Murdoch in Sydney; Editing by Saad Sayeed, Alexander Smith and Gareth Jones)
By Scott Murdoch and Niket Nishant
