Tech selloff spreads, pound slides as May battles

Dubai - A selloff in US technology stocks spread through Asia and Europe, battering shares from South Korea to the Netherlands. The pound retreated as an embattled Theresa May fought to survive the fallout from the British general election.

Samsung Electronics, ASML and Tencent led declines in Europe and Asia, dragging down benchmark indices.

US stock futures also fell as markets continue to digest the Nasdaq 100’s plunge on Friday. After the biggest drop in eight months, sterling appears to be looking past the potential benefits of a so-called soft Brexit amid ongoing political uncertainty. Italian bonds rallied as populists took a hit in local elections. Palladium extended its world-beating rally.

The sudden slide in tech stocks, which had helped send global equities to repeated record levels this year, blindsided many investors after markets largely brushed aside last week’s trio of risk events. The question now is whether the drops represent merely a pause or a more fundamental crack in the US stock bull market.

“There’s a chance US internet technology stocks that have propelled a global stock rally will now serve as a buzz kill,” said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo.

Meanwhile, in Washington the drama continues. Attorney General Jeff Sessions offered to speak to the Senate Intelligence Committee to answer questions about alleged Russian meddling in the 2016 presidential election.

And the Federal Reserve is set to lift rates, leading a pack of central banks that are mostly nodding in the direction of removing ultra-accommodative policy.

Here’s what investors will be watching this week:

Theresa May will address rank-and-file Tory lawmakers on Monday, in a meeting that will test her chances of staying in office. A day later, she’ll meet Northern Ireland’s DUP leader Arlene Foster in a bid to reach a deal to govern together. Sessions will testify before the Senate on Tuesday.

Fed policy makers are forecast to raise their benchmark interest rate for the second time this year on Wednesday. Central banks in Japan, Switzerland and Britain are also scheduled to weigh in with policy decisions this week.

Here are the main moves in markets:


The Stoxx Europe 600 Index slid 0.9% as of 12:30, with ASML dropping 4.1%. S&P 500 Index futures retreated 0.3%. The benchmark gauge fell 0.1% on Friday, while the tech-heavy Nasdaq Composite Index dropped 1.8%.

Apple sank 3.9%, while Microsoft, Amazon, Facebook and Alphabet all lost more than 2%. France’s CAC 40 lost 1.1% even as Emmanuel Macron headed for a clear majority in the National Assembly. His success appears to be largely priced in.


The pound fell 0.4% to $1.2700. The currency lost 1.6% on Friday.  The euro strengthened 0.2% to $1.1218. The Bloomberg Dollar Spot Index fell 0.1% after gaining 0.5% over the previous three sessions.


The yield on 10-year Treasuries was little changed. UK benchmark yields decreased three basis points, after dropping three basis points on Friday. French yields slipped four basis points while those in Germany fell one basis point. Italian 10-year yields tumbled six basis points.


West Texas crude added 1.3% to $46.42 a barrel after Saudi Arabia and Russia sought to reassure investors that coordinated production cuts by OPEC and its partners are draining a global glut.

Gold rose 0.2% to $1 269.74 an ounce, after three days of declines. Palladium rose as much as 2.7% before trading 1.2% higher.


Tech shares were the biggest losers on the MSCI Asia Pacific Index, which dropped 0.3%. South Korea’s Kospi lost 1%, with Samsung Electronics slumping 1.6%.

Hong Kong’s Hang Seng Index declined 1.2%, as Tencent fell 2.5%. Markets in Australia, Malaysia and the Philippines were closed for holidays.

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