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, technology companies led European stocks lower in early trading.
By 0749 GMT, the pan-regional STOXX 600 (STOXX) index was down 1.1 percent, with tech stocks (SX8P) leading sectoral fallers, down 2.6 percent, after shares in Facebook (NASDAQ:FB) fell further on continued privacy concerns.
A pressure on the heavyweight banking sector is also put by further fall in bond yields put. After a fatal crash and fire of a Tesla car prompted a U.S. federal field investigation, shares in electric car maker Tesla (NASDAQ:TSLA) tumbled on Tuesday.
After short-seller Citron Research called the stock “most vulnerable” to privacy regulations, Twitter tumbled. “I suspend self-driving car tests across the globe”, said chipmaker Nvidia Corp (O:NVDA), a week after an Uber Technologies Inc autonomous vehicle struck and killed a woman crossing a street in Arizona.
Investors are concerned that an increase in regulation could spark a further sell-off and tech was a key driver behind a rally to record highs in global equity markets.
Top fallers among European tech stocks were chipmakers Infineon (DE:IFXGn), ams (S:AMS) and STMicro (MI:STM) all down between 2.8 and 4.4 percent.
UniCredit in a note said that a recent stream of negative news has acted as a trigger for the sell-off in the U.S. 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.
Among banks, big decliners included UBS (S:UBSG), Commerzbank (DE:CBKG), and Credit Suisse (S:CSGN), which all declined more than 1 percent, after German bond yields fell below 0.5 percent for the first time since early January.
Among gainers, Shire (L:SHRS) was up 4.3 percent, with traders citing an upbeat broker note.
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