Tech stocks rattled on global selloff

Tech stocks rattled on global selloff

Global stocks have been hit after disappointing earnings from Chinese internet company Tencent Holdings upset technology shares and a plunge in commodities weighed on resource producers.

Tencent’s first profit decline in at least a decade rattled emerging-market equities.

“Tech stocks are pulling the markets lower,” said Naeem Aslam, chief market analyst at TF Global Markets in London. “We are seeing investors becoming more concerned about the geopolitics,” he said.

With the bull market in American stocks just one week away from becoming the longest in history, investors have become increasingly cautious amid lingering trade tensions between China and the US.

Markets have been rocked over the past week as turmoil in Turkey weighed on sentiment across many emerging- and developed-nation assets.

The country announced an additional tax on imports of a broad range of American goods, signalling its dispute with the US will continue.

“I think we have not seen the worst of it yet,” Peter Tchir, head of macro strategy at Academy Securities, said

“You’ve only started to see a knock-on effect. I think this is truly the eye of the storm and we are going to get another round of emerging-market weakness,” he said.

Elsewhere, Hong Kong intervened to defend its peg to the dollar for the first time in three months after the local currency fell to the weak end of its trading band.

US stocks have stumbled just as they become popular again, said Chris Beauchamp at online broker IG.

“We are being treated to a mid-summer ‘sea of red’ in equities, as the morning’s drift lower turns into a full-blown rout. The stronger dollar has hobbled commodity prices, hitting mining stocks across Europe, with the Ftse 100’s list of losers dominated by mining names like Glencore and BHP Billiton,” Beauchamp said.

“The ingredients for a classic summer swoon are all there, from rising volatility to an emerging markets crisis, just the thing to provide some excitement before normality returns in September,” he said.

Raw-materials producers dragged European shares down as copper and zinc sank to the lowest in more than a year.

In Turkey, the lira gained after the banking regulator moved to deter short-selling in the currency.

In the US, Tesla shares clawed back much of the loss after a report that the US Securities and Exchange Commission sent a subpoena to the electric-car maker regarding Elon Musk’s privatisation plans and his comments about securing funding.

Bloomberg and Irish Examiner staff

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