Reported by The Guardian
Asian and European markets follow US tech rout with many analysts predicting more waves of selling to come
European and Asian stock markets fell sharply on Friday after the Democrats’ decisive victory in the midterms triggered a rout in US tech stocks a day earlier.
A sell-off on Wall Street on Thursday was followed by sharp falls in Asian stock markets on Friday. The investor sentiment then reached London, where the market was, at one stage, poised for its worst day since March.
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The FTSE 100 index, which tracks blue-chip shares listed in London, was down as much as 254 points, or 2.35%, at 10,528 points during a wave of selling in morning trading. But by the close of the day it had clawed back some of its losses to be down 1%, helped by a rise in US stocks when Wall Street reopened.
Germany’s Dax index fell by 2%, France’s Cac 40 dropped by 0.8% and Spain’s Ibex lost 0.6%.
Susannah Streeter, the chief investment strategist at Wealth Club, said: “The tech sell-off has intensified, with the pain of the brutal sell-off on Wall Street carried straight through to Asia and knocking sentiment in Europe .
“Big worries are colliding – the build-out of datacentres looks set to slow, which risks shredding the spending spree underpinning the boom, right at the time that investors have become super nervous about returns on this massive investment.”
However, there were signs of easing jitters on Wall Street on Friday, where tech stocks rose in early trading, lifting the S&P 500 share index by 0.8% by early afternoon in New York and the Nasdaq by 1.6% – which only recovered a portion of their previous day’s losses. That followed a stronger-than-expected employment report that showed the US economy added 165,000 new jobs in October, pulling the unemployment rate down to 4.1%.
On Thursday, the Nasdaq share index had its worst day in 19 months after slumping 5.5%.
Chip stocks led the slump on Thursday, with the memory maker SanDisk tumbling by 22% and the hard drive maker Western Digital falling by 17%. Wall…