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Europe: Shares hit by tech sell-off
[MILAN] Technology companies led European stocks lower in early trading as persistent concerns over a regulatory crackdown on big tech and a string of negative headlines overnight hit sentiment towards the sector that drove a long bull market.
The pan-regional STOXX 600 index was down 1.1 per cent by 0749 GMT, with tech stocks leading sectoral fallers, down 2.6 per cent, after shares in Facebook fell further on continued privacy concerns.
A further fall in bond yields also put pressure on the heavyweight banking sector.
Shares in electric car maker Tesla tumbled on Tuesday after a fatal crash and fire of a Tesla car prompted a US federal field investigation. Twitter tumbled after short-seller Citron Research called the stock "most vulnerable" to privacy regulations. And chipmaker Nvidia Corp said it suspended self-driving car tests across the globe, a week after an Uber Technologies Inc autonomous vehicle struck and killed a woman crossing a street in Arizona.
Tech was a key driver behind a rally to record highs in global equity markets and investors are concerned that an increase in regulation could spark a further sell-off.
Top fallers among European tech stocks were chipmakers ams , STMicro and Infineon, all down between 2.8 and 4.4 per cent.
"A recent stream of negative news has acted as a trigger for the sell-off in the US tech sector. But the underlying cause... is extremely stretched valuation metrics that have generated a sizeable misalignment with fundamentals, mostly for the big technology stocks," said UniCredit in a note.
Among banks, big decliners included Commerzbank, UBS and Credit Suisse, which all declined more than 1 per cent, after German bond yields fell below 0.5 per cent for the first time since early January.
Among gainers, Shire was up 4.3 per cent, with traders citing an upbeat broker note.