European stocks drop as technology shares pace renewed declines

European equities resumed declines after yesterday’s short reprieve as technology shares led the retreat along with mining stocks.

The Stoxx Europe 600 Index was down 0.3%. SAP dropped 0.7%. The US stock market is closed today for the Thanksgiving holiday, and global equity trading volumes are set to be below average.

European stocks attempted to stage a recovery from a two-year low yesterday as investors assessed the possibility of the US Federal Reserve softening its policy stance. Markets worldwide have been under pressure because of rising US rates and trade tensions with China.

“We are underweight on European stocks for several reasons. We think the earnings outlook is less supportive than the earnings outlook in the US,” said Willem Sels, chief market strategist at HSBC Private Banking. “Valuations in Europe are more attractive than in the US, but the differential has narrowed considerably, as a result of the recent sell-off in the US.”

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