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A selloff in global technology shares sent benchmark indexes tumbling from Sydney to London amid heightened concerns about corporate earnings. The dollar halted a rebound.
Europe’s benchmark equity gauge headed for a three-month low as automakers also slumped after Renault SA’s profit fell short of estimates.
ASML paced technology-stock losses in the region after Samsung Electronics and Tencent led declines in Asia. US equity futures also dropped as Amazon.com fell in after-hours trading. The euro strengthened as government bonds across the region declined.
The tech selloff comes after US stocks rallied to records amid signs of economic growth globally and as more than three-quarters of reporting S&P 500 companies delivered earnings that beat forecasts. Technology shares have led the charge, with companies in the sector soaring 22% this year for the best performance among 11 groups in the S&P 500.
“With Amazon’s earnings falling short of estimates, the US market may readjust its expectations,” said Hideyuki Ishiguro, a senior strategist at Daiwa Securities in Tokyo.
“Investors are becoming increasingly wary over the historically low volatility levels, with a host of key economic data coming out in the US.”
Stocks were rattled in the US on Thursday after JPMorgan Chase & Co derivatives strategist Marko Kolanovic said the market’s volatility drought could presage protracted histrionics.
Here are some key events that wrap up this week:
• The US economy probably accelerated in the second quarter to a 2.5% annualised pace, fueled by a pickup in consumer spending after a slowdown at the start of the year.
• Corporate results due on Friday in the US include Exxon Mobil.
Here are the main moves in markets:
Asia
• The MSCI Asia Pacific Index dropped 0.6%, erasing its gain for the week.
• Tech shares in the gauge fell 1.5%.
• South Korea’s Kospi index slumped 1.7%, the most since November, with Samsung tumbling 4.1%.
• Hong Kong’s Hang Seng Index lost 0.5%, with Tencent dropping 0.9%.
• Benchmark indices in Australia, Taiwan and Singapore were down more than 0.7%.
• The Shanghai Composite Index rose 0.1%.
• Japan’s Topix index fell 0.4%.
• Data on Friday showed that while household spending in Japan rose 2.3%, its first gain in more than a year, Japan’s key price gauge was unchanged in June.
Stocks
• The Stoxx Europe 600 Index declined 1% as of 10:33 to the lowest in almost 14 weeks.
• Technology shares fell 1.4% and automakers dropped 1.7%.
• The UK’s FTSE 100 Index decreased 0.5%.
• Germany’s DAX Index dipped 0.7% to the lowest in almost 14 weeks.
• Futures on the S&P 500 Index declined 0.3%, while Nasdaq futures lost 0.7%.
Currencies
• The Bloomberg Dollar Spot Index decreased 0.1%.
• The euro gained 0.2% to $1.1704. It added 0.7% to 1.13499 Swiss francs, climbing for a fourth day.
• The British pound increased 0.1% to $1.3078.
• The yen rose less than 0.1% to ¥111.10/$, leaving it little changed for the week.
Bonds
• The yield on 10-year Treasuries climbed less than one basis point to 2.31%.
• German and French 10-year yields gained two basis points.
• Britain’s 10-year yield increased one basis point to 1.209%.
Commodities
• West Texas Intermediate was little changed at $49.05 a barrel.
• Oil is up 7.1% for the week, its best performance since the end of June, as sliding US inventories and signs of stronger demand raise speculation a supply glut in the world’s biggest consumer may ease.
• Copper fell 0.3%, the first retreat in more than a week and the biggest fall in a week.
• The Bloomberg Commodity Index declined 0.1%.
• Gold was little changed at $1 259.38 an ounce. The precious metal is on course for a third week of gains.
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