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Europe: Tech stocks drag shares from multi-year highs
[LONDON] European shares retreated further from 7-1/2-year highs hit last week, led lower by weaker technology stocks that slid on the back of a sell-off in their US peers.
The STOXX Europe 600 Technology Index fell 2.9 per cent, with traders citing concerns over weak computer sales weighing on the US technology sector.
British chipmaker ARM fell 5.9 per cent while Dutch semiconductor company ASML declined by 5.2 per cent.
Germany's DAX equity index, which hit a record of 12,219.05 points last week, also fell 0.6 per cent to 11,928.88 points.
Data on Wednesday showed German business morale rose for the fifth month in a row in March, hitting its highest level since July 2014, while French business morale stood at its highest in nearly three years in March.
On Tuesday, figures showed Germany's private sector grew in March at its strongest rate since July.
However, the strong German data has contributed to a rebound in the euro, which has impacted the DAX as a weaker euro helps German exporters. "A strong euro is generally bad for the DAX, and it's giving investors an opportunity to take some profits," said Hantec Markets' analyst Richard Perry. "But I don't think this will change the longer-term picture for the DAX, which should continue to perform well going forward," added Mr Perry.
The pan-European FTSEurofirst 300 was down by 0.7 per cent at 1,592.93 points going into the close of the trading session, below 7-1/2 year highs reached last week.
European food stocks also remained in negative territory despite Heinz's plan to buy a majority stake in Kraft Foods.
The FTSEurofirst has soared 16 per cent this year, helped by the European Central Bank's decision to buy government bonds to inject more liquidity into markets and boost economic growth. "Today is a negligible correction and we should soon see the bull pressures re-energised," said Mike Turner, European equity options broker at XBZ Limited.
Accor fell 3.3 per cent after Eurazeo and Colony Capital sold a near 10-per cent stake in the hotel group.
But shares in steel companies Acerinox, Outokumpu and Aperam rose after the European Union announced punitive anti-dumping duties on stainless steel cold-rolled sheet from China and Taiwan.
Shares in oil and gas industry pipes maker Vallourec also rose 4.7 per cent on speculation it plans a tie-up with another company. A Vallourec spokeswoman declined to comment.