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Asian markets hit by negative China export data

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Sentiment shifting for AI rally; Softbank tanks

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Safety bid for bonds, gold and yen

(Updates prices at European market open)

By Lawrence White

LONDON, Nov 7 (Reuters) - Tech-heavy stock markets were

heading for their biggest weekly fall in seven months on Friday,

as investors fretted over the sustainability of a rally in

artificial intelligence stocks.

Weaker-than-expected China trade data also showed how

hard U.S. President Donald Trump's tariffs have hit.

The STOXX benchmark of 600 big European companies edged

down 0.17% in early trading Friday morning, even as U.S. markets

looked set for a brighter open with S&P 500 futures and

Nasdaq 100 futures up 0.3% following a 1.9% drop for the

Nasdaq on Thursday.

For the week so far, the world's biggest tech index is down

2.8%, which if sustained would mark its largest one-week drop

since April, when tariffs were announced. The Nasdaq has gained

more than 50% since then.

China's exports shrank 1.1% in October, the worst

performance since February, chilling Asian markets with a stark

reminder of the manufacturing juggernaut's reliance on American

consumers.

China's blue-chip CSI300 Index and the

Shanghai Composite Index both finished 0.3% lower on

Friday.

Japan's Nikkei fell 1.2% to head for a weekly loss

of 4.1%, the largest since April, while in Seoul the KOSPI

fell 1.8% for a 3.7% weekly fall, the largest since

February.

Chip and cable makers were among the biggest losers, with

tech investor Softbank Group Corp down nearly 20% this

week. Bitcoin, sometimes a bellwether for tech sentiment,

is down 8% on the week to $101,525.

FEARS OVER BUBBLE IN AI STOCKS

There has been no obvious trigger for the pullback in

AI-related share prices but the market reaction to recent

results shows how some of the fears about a bubble in the sector

and questions about profitability are starting to surface.

Late last month, Meta stock dived after the company

outlined big capital expenses as it builds data centres in an AI

push. Shares in data and AI firm Palantir Technologies ( PLTR )

have also tumbled despite beating earnings forecasts.

"Sometimes it's a gradual shift in markets whereby an

increasing number of people say: 'Well, I'm well positioned ...

maybe I'll take some money off the table,'" said Herald van der

Linde, head of equity strategy for Asia Pacific at HSBC.

"And a second one says so. And a third one. And a fourth one

says, hey, these three are selling. I might maybe be selling as

well, right? So it's a shift in the market sentiment that has

its own sort of dynamic. That might well be unfolding a little

bit now."

BONDS, GOLD SHINE AS SAFETY SOUGHT

Bond markets rallied on a clamour for safety and also as

some second-tier U.S. employment data pointed to a wave of

layoffs that could support further U.S. rate cuts.

Benchmark 10-year U.S. Treasury yields fell 6.4

basis points to 4.09% on Thursday after outplacement firm

Challenger, Gray & Christmas said there had been a surge in

announced job cuts in October. The yields were steady on Friday.

Such private surveys have gained attention in the market

during a prolonged U.S. government shutdown that has halted

official U.S. data publication.

The dollar index, which measures the currency's

strength against a basket of six peers, edged up 0.2% to 99.845,

while the euro was mostly steady at $1.1535.

The safe-haven yen was set for a modest weekly rise of about

0.3%, and was last at 153.46 per dollar.

Gold traded above $4,000 an ounce as the government

shutdown further boosted safe-haven demand, although the

precious metal was still some way short of a record high of

$4,381.21 on October 20.

Oil prices rose slightly following three days of

declines on worries about excess supply and slowing demand in

the U.S., with Brent crude futures up 69 cents, or

1.09%, to $64.05 a barrel.

Soybean prices headed for a weekly drop with no sign yet of

big Chinese orders, after the White House said Beijing had

pledged to buy 12 million tons by year end.

(Editing by Lincoln Feast, Jacqueline Wong and Sharon

Singleton)