Stock Markets Drop As Tech Rally Fades

Major European and Asian stock markets retreated Friday following a broadly negative lead from Wall Street, where tech giants led a sell-off on profit-taking

London, (UrduPoint / Pakistan Point News – 21st Jun, 2024) Major European and Asian stock markets retreated Friday following a broadly negative lead from Wall Street, where tech giants led a sell-off on profit-taking.

On the corporate front, British soft drinks manufacturer Britvic grew seven percent following news that it has rejected a takeover approach worth £3.1-billion ($3.9 billion) from Danish beer giant Carlsberg, arguing that it significantly undervalued the maker of Robinsons squash.

With focus on European political uncertainty ahead of a French snap election, data Friday showed growth of business activity in the eurozone slowed down in June after the manufacturing sector posted its biggest decline in six months.

The HCOB Flash Eurozone purchasing managers’ index published by S&P Global recorded a figure of 50.8, down from 52.2 in May and its lowest level in three months.

A PMI reading above 50 indicates growth, while a figure below 50 shows contraction.

In the UK, the private sector grew at its slowest rate for seven months in June, as goods and services inflation remained stubbornly high and firms put spending decisions on hold until after the general election.

Investors digested also mixed official economic data before Britain’s upcoming voted on July 4, with main opposition Labour tipped to comfortably beat the governing Conservatives.

UK state debt ballooned in May to reach levels not seen for more than 60 years, underscoring the perilous state of the public purse for the next government.

Public sector net debt as a proportion of gross domestic product rose to 99.8 percent in May. That marked the highest reading since March 1961.

At the same time, retail sales rebounded 2.9 percent in May from the prior month on strong demand for clothing and furniture.

In the United States, worse-than-forecast data provided further signs that the world’s number one economy was softening, but that was not enough to help push the S&P 500 and Nasdaq to record highs closes on Thursday.

The readings showed more people claiming for unemployment benefit than estimated, housing starts falling and a key gauge of business confidence for June well down from May.

The economic figures boosted interest rate cut hopes but Minneapolis Fed boss Neel Kashkari said it could take a year or two to bring inflation back down to the central bank’s two percent target, echoing his colleagues’ warnings that they wanted to take their time before cutting borrowing costs.

The rally in tech shares also lost steam, with shares in market titans including Nvidia, Apple and Microsoft hit by profit-taking.

The 3.5-percent drop in Nvidia’s share price meant it relinquished its crown as the world’s most valuable publicly traded firm to Microsoft, which it had overtaken earlier this week.

Asian traders tracked the weak lead, with Tokyo, Hong Kong, Shanghai, Seoul, Wellington, Taipei, Mumbai and Manila all down. Singapore, Sydney, Bangkok and Jakarta edged up.

“The selloff in US tech overnight is weighing,” said Chamath de Silva of BetaShares Holdings.

– Key figures around 1100 GMT –

London – FTSE 100: DOWN 0.8 percent at 8,209.53 points

Paris – CAC 40: DOWN 0.6 percent at 7,626.36

Frankfurt – DAX: DOWN 0.6 percent at 18,148.35

EURO STOXX 50: DOWN 0.8 percent at 4,907.97

Tokyo – Nikkei 225: DOWN 0.1 percent at 38,596.47 (close)

Hong Kong – Hang Seng Index: DOWN 1.7 percent at 18,028.52 (close)

Shanghai – Composite: DOWN 0.2 percent at 2,998.14 (close)

New York – Dow: UP 0.8 percent at 39,134.76 (close)

Euro/dollar: DOWN at $1.0680 from $1.0705 on Thursday

Euro/pound: DOWN at 84.55 pence from 84.56 pence

Dollar/yen: UP at 159.01 yen from 158.91 yen

Pound/dollar: DOWN at $1.2633 from $1.2657

West Texas Intermediate: FLAT at $81.26 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $85.64 per barrel


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