US stocks moved lower on Wednesday as trader sentiment took a downturn after a warning from artificial intelligent (AI) giant Nvidia that the US was limiting chip exports to China.
London’s FTSE was retreating during the day, but made headway later in the afternoon following gains from mining and energy stocks.
The index was up 26.48 points, or 0.32%, to close at 8,275.6.
Germany’s Dax index also staged a recovery on Wednesday afternoon, gaining 0.27% at the end of the day. France’s Cac 40 was treading water, closing 0.07% lower.
US stocks were declining when trading began on Tuesday, with the technology-focused Nasdaq index tumbling about 2%, dragged lower by losses of around 7% for Nvidia.
By the time European markets closed, the S&P 500 was down about 1.2%, and the Dow Jones was 0.5% lower.
Nvidia told investors on Tuesday evening that it is expecting to face a 5.5 billion US dollar (£4.2 billion) hit from charges relating to a new licence to ship its chips to China, including Hong Kong.
The company said it been informed by the US government that it needs a licence to export its H20 AI chip to China.
The requirement will be in place for the “indefinite future”, Nvidia said.
Tensions between the US and China have been escalating, with the world’s two largest economies steadily increasing tariffs on each other’s goods since Donald Trump raised tariffs on dozens of countries.
Russ Mould, investment director at AJ Bell, said the update from Nvidia “marks a new chapter in the escalating tit-for-tat between Washington and Beijing”.
He added: “The deteriorating relationship between the two countries means China’s better-than-expected GDP (gross domestic product) figures for the first quarter may not attract too much attention given they cover a period before the Trump administration unleashed its trade policy.”
Meanwhile, the price of Brent crude oil soared about 1.6% to 65.70 US dollars per barrel.
The pound was continuing to rise against the US dollar, and was up 0.1% to 1.324. However, sterling dropped about 0.8% against the euro, to 1.164.
In company news, shares in FTSE 100-listed Bunzl plummeted by more than a quarter after the distributor said it had seen weaker sales in its North American business, and flagged a “significant decline” in its adjusted operating profit.
The business, which has its largest market in the US, blamed a “more uncertain macro environment” following the swathe of new tariffs introduced by Mr Trump on goods entering the country.
Bunzl said it was ramping up cost-cutting efforts to try and improve its financial performance. Shares in the company were 25.9% lower at close.
Elsewhere, Britain’s biggest housebuilder Barratt Redrow said its forward home sales were down 10%, compared with the same point last year.
Nonetheless, the company said it was on track to complete between 16,800 and 17,200 homes this year, in line with previous forecasts. Shares in the firm closed 2.6% higher.
The biggest risers on the FTSE 100 were Endeavour Mining, up 132p to 2,184p, Shell, up 63p to 2,434.5p, AB Foods, up 55p to 2,159p, Barratt Redrow, up 10.9p to 438.6p, and Admiral Group, up 78p to 3,258p.
The biggest fallers on the FTSE 100 were Bunzl, down 788p to 2,290p, Diploma, down 136p to 3,824p, Intermediate Capital, down 60p to 1,756p, Informa, down 23.6p to 691.4p, and Melrose Industries, down 13.2p to 419.4p.
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