Tech sell-off hits European and Asian Indices

Declines for Wall Street’s tech sector unnerved global stocks on Wednesday. The tech-heavy Nasdaq fell 2.9% in New York on Tuesday, where the S&P 500 dropped 1.7%. Concern about the possibility of further regulation of the sector followed reports that Facebook founder Mark Zuckerberg was willing to testify before the US Congress over a data privacy scandal.

Contagion also hit Europe, as by mid-morning trading most indices are retesting some of their lowest levels of 2018, with the international Stoxx 600 touching a nadir for the year and Frankfurt’s Xetra Dax on the cusp of doing the same. Overall, the Europe-wide Stoxx 600 was down 1.1%, with Frankfurt’s Xetra Dax 30 down 0.9% and London’s FTSE 100 down 0.3%. The Stoxx tech index was down 2.2%, led by Austria Microsystems, 8.3% weaker, and ST Micro, off 5%.

In Japan, the Topix index slid 1% while South Korea’s Kospi Composite index also fell 1.3%. Hong Kong’s Hang Seng index fell 2.5%.

In the fixed income market, the US yield curve is flattening, which occurs when investors demand a narrower premium for longer-term government debt. The difference between 10and two-year Treasury yields on Wednesday was 0.4998 percentage points. If that level holds it would be one of only three times since the start of the economic recovery that the gauge has closed at such a low level, Reuters data show.

Brent crude, the international benchmark, slipped 0.5% to $69.74 a barrel, pulling back further from the one-month high of $71.05 it notched up on Monday. Gold was flat at $1,343 an ounce.