European shares dragged down by tech’s worst day since October

Tech stocks plunge on profit taking as Iseq index follows other European markets lower

Apple was among the tech stocks in decline on Tuesday. Photograph: iStock

Apple was among the tech stocks in decline on Tuesday. Photograph: iStock

 

European shares ended lower on Tuesday, with the technology sector having their worst day since late-October after a sudden drop in big US tech stocks. In the United States, big names such as Apple, Microsoft, Amazon, Facebook and Google were all lower for a second day as the Nasdaq traded down 2 per cent.

Dublin

The Iseq index followed other European bourses into the red, ending the day down 1.1 per cent.

Banks were in the doldrums both locally and across the continent. Having passed the €5 per share mark earlier in the day, Bank of Ireland closed 4.3 per cent lower at €4.67 while AIB was down 3 per cent at €2.36.

Travel and leisure was also weak across Europe. Flutter was down 3 per cent to €164.50 while Ryanair fell 2.3 per cent to €16.50

Housebuilder Cairn Homes was one of the few stocks locally to shine, gaining 1.6 per cent to €1.10. Hotels group Dalata was also higher, up 1.5 per cent to €4.58.

London

British shares were subdued on Tuesday after a bank-holiday closure, with a drop in bond yields across Europe dragging financial stocks down, while data showed manufacturing activity grew at its fastest pace since 1994 as businesses tried to make up for lost ground during the pandemic.

The blue-chip FTSE 100 index fell 0.7 per cent, with bank stocks, including HSBC, Barclays and Standard Chartered posing the biggest drag on the index.

Heavyweight oil majors BP and Royal Dutch Shell gained 2.3 per cent and 1.1 per cent respectively. The stocks provided the biggest boost on optimism about higher demand as economies reopen.

Among other stocks, dollar-earning large companies Diageo, Imperial Brands and British American Tobacco gained as the pound softened.

Europe

The pan-European Stoxx 600 index shed 1.4 per cent, with tech stocks losing 3.8 per cent and some analysts attributing the drop to profit taking.

Chipmaker Infineon fell 5.9 per cent and was among the top drags on the German index, after chief executive Reinhard Ploss said he was expecting supply constraints in the automotive segment to ease only in the second half, with lost volumes likely to be made up in 2022. Europe’s carmakers fell 3.2 per cent.

Miners rose 0.2 per cent, and oil and gas stocks fell the least, supported by strong resource prices as investors bet on a strong global rebound after massive vaccination drives in developed countries and unprecedented stimulus.

German meal-kit delivery company HelloFresh fell 6.7 per cent as worries about consumer behaviour, amid easing lockdowns, overshadowed a surge in first-quarter customer base.

Software company Teamviewer, another stay-at-home beneficiary, dropped 12.3 per cent despite reporting quarterly orders and core profit ahead of expectations.

Jewellery maker Pandora jumped 6 per cent to the top of the Stoxx 600 after reporting quarterly operating profit above estimates, fuelled by strong online sales and plans to push for growth in the US and China.

Norwegian hydrogen firm Nel slumped 15.8 per cent to the bottom of the Stoxx 600 after its first-quarter results missed expectations.

Wall Street

The Nasdaq fell more than 2 per cent on Tuesday as steep declines in megacap growth stocks pushed Wall Street below record trading levels, with investors seeking shelter in more defensive parts of the market.

Highly-valued technology companies including Microsoft, Alphabet, Apple, Amazon and Facebook fell between 2.3 per cent and 4.2 per cent.

All the 11 major S&P 500 sectors were down, with technology, communication services and consumer discretionary falling more than 2 per cent each. The defensive consumer staples, utilities and real-estate sectors fell the least. – Additional reporting: Reuters