Markets

Global market sell-off spreads to Europe

Tech stocks bear brunt of selling pressure

Wednesday’s sell-off on Wall Street was the biggest fall in US stocks for more than eight months. Photograph: iStock

Thu Oct 11 2018 - 14:04

A sharp Wall Street sell-off has sent tremors through global equity markets, pulling down Asian and European stocks on Thursday as worries over the US-China trade war and the end of years of cheap money darken investor sentiment.

Technology shares, which led the selling during Wednesday’s New York trading day, were also hit hard internationally, with the Stoxx technology index down 1.7 per cent after falling nearly 3 per cent earlier in the day.

The Iseq was 1.66 per cent weaker at lunchtime.

Analysts and traders said the drops were a reaction to rising bond yields following the Fed’s rate increase last week and strong US economic data. US president Donald Trump blamed Fed tightening for the sell-off.

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“The Fed is making a mistake. They’re so tight. I think the Fed has gone crazy,” he said on Wednesday.

US inflation data for September narrowly missed forecasts and helped stock futures up off lows touched before the numbers were released. The data showed a year-on-year rise in core consumer prices of 2.2 per cent, softer than the 2.3 per cent forecast. After the data, Nasdaq Composite futures anticipated a rise of 0.1 per cent, having been down by as much as 0.9 per cent beforehand. The equivalent S&P 500 contract pointed to a fall of 0.1 per cent.

Biggest fall

Wednesday’s sell-off on Wall Street was the biggest fall in US stocks for more than eight months. The Nasdaq Composite dropped by more than 4 per cent - its biggest one-day decline since June 2016 - while the S&P 500 fell 3.3 per cent on its worst day since February. The benchmark index has fallen five days in a row, the longest losing streak of Mr Trump’s presidency. – Copyright The Financial Times Limited 2018

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