Shares in artificial intelligence chip designer Nvidia rose nearly 6 per cent after a three-day rout that saw $557billion (£440billion) wiped off its value.

On a day of much-needed relief for investors with Nvidia stock or funds that hold the firm, the shares reached almost $125, nudging it back towards a market capitalisation of $3 trillion (£2.4 trillion).

The mini-rally came after the US chip giant lost 16 per cent of its value in just three days in what has been described as ‘the biggest bloodbath in investor history’.

Rebound: On a day of relief for investors with Nvidia stock or funds that hold the company, the shares reached $123, nudging it back towards a market capitalisation of $3 trillion

Rebound: On a day of relief for investors with Nvidia stock or funds that hold the company, the shares reached $123, nudging it back towards a market capitalisation of $3 trillion

Rebound: On a day of relief for investors with Nvidia stock or funds that hold the company, the shares reached $123, nudging it back towards a market capitalisation of $3 trillion

The slump ended Nvidia’s short-lived reign as the world’s most valuable company and having briefly overtaken both Microsoft and Apple it now lies in third place behind them.

But analysts said the recent surge in the Nvidia share price – it is still up more than eight-fold since the start of last year – meant a correction was inevitable and urged investors to stay calm.

Neil Roarty, an analyst at investment platform Stocklytics, said: ‘A week ago Nvidia was celebrating becoming the most valuable company in the world. Now it’s licking its wounds. 

Even against this backdrop, there may still be reasons for optimism. The fundamentals behind Nvidia’s growth remain the same. 

If you believe that the AI technology its chips are powering will completely recalibrate the global economy – and many do – then a $3 trillion market cap suddenly looks considerably more reasonable.’

The FTSE 100 index fell 0.4 per cent, or 33.76 points, to 8247.79 and the FTSE 250 slipped 1 per cent, or 199.14 points, to 20363.43.

Stock Watch – Gear4Music

Musical instrument seller Gear4Music is back in the black thanks to a cost- cutting scheme.

The York-based company said it made profits of £1.1million in the year ending March 31.

Although sales fell 5 per cent to £144.4million, the firm managed to cut its overheads.

Investors welcomed the strong bounceback after losses to the tune of £400,000 last year. 

Shares surged 25 per cent, or 33.5p, to 167.5p.

Ocado suffered another bleak session after analysts downgraded the outlook for the stock.

Morgan Stanley cut its target price to 215p from 345p, while Goldman Sachs lowered it to 400p from 680p. 

The verdicts came days after Ocado’s Canadian partner Sobeys delayed plans to open a fourth robotic warehouse. 

Shares fell another 7.1 per cent, or 22.1p, to 290.4p and have lost more than 60 per cent of their value this year.

Insurer Admiral Group went in the other direction after analysts at Berenberg raised their price target to 3127p from 2973p and advised clients to buy the stock. 

Shares in Admiral gained 2.3 per cent, or 58p, to 2627p. An activist investor has ramped up pressure on Elementis to sack its chief executive – and warned it will target the chairman if he does not act. 

Gatemore Capital Management repeated its call for the removal of Paul Waterman from his job at the chemicals group, which makes the ingredients used in deodorants and skin creams.

In an open letter to the board, Gatemore managing partner Liad Meidar said there was ‘critical need for urgent changes’ and warned that if Waterman is not axed he could seek to unite shareholders in a bid to oust chairman John O’Higgins. 

Elementis shares fell 1.1 per cent, or 1.6p, to 147p.

AstraZeneca said its blockbuster drug Imfinzi failed as a follow-up therapy in a late-stage trial in patients with a type of early-stage lung cancer.

The shares inched up 0.6 per cent, or 72p, to 12550p.

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