Tech stock sell-off spreads through world markets
LONDON (AP) — Mounting concerns over technology stocks weighed hard on stock markets around the world on Monday.
The latest bout of nerves started last Friday when mainstays of the Internet economy such as Google and Netflix that have surged over the past year were hammered as investors had a change of heart and decided prices were too high. The technology-heavy Nasdaq dropped 2.6 percent on Friday, its biggest one-day drop since February. It was down a further 1.4 percent Monday at 4,072.
“The handbrake turn in markets continued as Wall Street opened for the week,” said Brenda Kelly, chief market strategist at IG. “Previously racy stocks in the tech and biotech arenas have been dumped with unseemly haste.”
In Europe, the FTSE 100 index of leading British shares closed down 1.1 percent at 6,622.84 while Germany’s DAX fell 1.9 percent to 9,510.85. The CAC-40 in France ended 1.1 percent lower at 4,436.08.
In the U.S., the Dow Jones industrial average was down 0.8 percent at 16,278 while the broader S&P 500 index fell 1 percent to 1,847.
“Sentiment remains tricky for investors looking purely at valuations of companies, particularly within the tech-focused sectors,” said Joao Monteiro, analyst at Valutrades. “Therefore the upcoming earnings season, which begins in earnest on Tuesday when aluminum maker Alcoa reports, is crucial.”
Renewed concerns over Ukraine also unsettled investors, particularly in Europe. Pro-Russian separatists who seized a provincial administration building in the eastern Ukrainian city of Donetsk proclaimed the region independent — an echo of events prior to Russia’s annexation of Crimea.
Earlier in Asia, Japan’s Nikkei 225 led regional declines, dropping 1.7 percent to close at 14,808.85. Hong Kong’s Hang Seng was down 0.6 percent to 22,377.15, while South Korea’s Kospi gained 0.1 percent to close at 1,989.70. Markets in mainland China were closed for a holiday.
Investors this week will be looking ahead to some key releases for further clues on the economic outlook. On Tuesday, they’ll be awaiting a policy statement from the Bank of Japan that may reveal whether the central bank will provide further stimulus. On Wednesday, they’ll be scrutinizing minutes from the Federal Reserve’s policy setting committee.
The mood was less choppy in other markets. Among currencies, the euro was up 0.3 percent at $1.3746 while the dollar fell 0.2 percent to 103.03 yen.