Global Microsoft outage fuels further tech sector woes

Crowdstrike's Falcon Sensor software is causing Microsoft Windows to crash, causing shares in both firms to slide as the Stoxx 600 and the Nasdaq indexes both closed down

Fri, 19 Jul, 2024 - 18:25

The widespread technical outages that followed disruptions across Microsoft’s online services fuelled tech share woes.

The disruption comes as Microsoft said it resolved its cloud services outage that appeared to be linked to an issue at global cybersecurity firm Crowdstrike.

According to an alert sent by Crowdstrike to its clients, the company’s Falcon Sensor software is causing Microsoft Windows to crash and display a blue screen, known informally as the “blue screen of death”.

“Investors are already on edge for this tech rotation and this global outage adds a further dose of uncertainty,” said Ben Laidler, head of equity strategy at Bradesco BBI.

Europe’s Stoxx 600 index lost 0.5%, falling for a fifth day, on track for the longest losing streak since October.

'We’re currently experiencing disruption across the network due to a Global 3rd party IT outage, which is entirely out of our control,' Ryanair said. Picture: Nicholas Ansell/PA

In US premarket trading, Microsoft shares dropped 2.8% and Crowdstrike shares slid as much as 14% after telling CNBC it had been affected by the outage.

The disruptions come toward the end of a week that’s seen the tech-heavy Nasdaq shed 3.7% — on track to be its worst since April.

As quarterly earnings continued to trickle in, Sartorius plunged 13% after the German electronics maker lowered full-year guidance. Computer games maker Ubisoft Entertainment slid more than 8% after mixed full-year targets, while gaming firm Evolution also tumbled after its earnings missed estimates.

Michael Metcalfe, head of global macro strategy at State Street Global Markets, said politics, interest rate expectations and corporate earnings were having a strong impact on world markets.

“The changing probability of a potential Trump presidency and what that might mean for different markets, whether it be his view of the dollar or tech regulation, has clearly created some market rotations this week,” he said.

On top of that investors are looking closely at the Federal Reserve’s response to improving inflation data and the US earnings season which is now in full swing.

“Tech has been where all the earnings growth has been (in recent years) so those will be the crucial thing for risk sentiment overall,” said Mr Metcalfe.

Meanwhile, Ryanair was among the vast number of companies and organisations that were impacted by a global tech outage on Friday.

Ryanair said its booking and check-in systems are currently unavailable and check-in for flights scheduled for today can be done at an airport.

“We’re currently experiencing disruption across the network due to a global third-party IT outage, which is entirely out of our control,” said a Ryanair spokesperson.

It was not immediately clear whether all reported outages were linked to Crowdstrike problems or there were other issues at play.