European stocks drop as selloff in technology shares resumes
On Friday European stocks dropped at the start of the last month of 2017 as a selloff in technology shares resumed. The dollar was steady and Treasuries gained after tax reform efforts in the U.S. stumbled.
The Stoxx Europe 600 Index fell to a two-week low, with all but one of the 19 industry sectors turning red. Tech stocks dropped a third day, bringing their decline this week to almost 5 percent, and car makers sagged. U.S. stockindex futures also declined. Treasury yields dropped back below 2.4 percent after climbing eight basis points in the previous two days. The euro pared an advance even after manufacturing data underscored the region’s economic resilience, while core European bonds gained.
The greenback is struggling after the U.S. Senate suspended voting on the tax bill until Friday as it emerged a key compromise to win a majority had collapsed, leaving Republicans scrambling to salvage the legislation. Markets have become sensitive to any progress on the reforms, which may give fresh impetus to the equity bull run into the final weeks of the year.
Elsewhere, oil rose after posting its longest streak of monthly gains since early 2016 in the wake of an OPEC-led coalition’s long-awaited extension of crude supply cuts. Copper led most industrial metals higher.
The Stoxx Europe 600 Index sank 0.6 percent as of 10:20 a.m. London time, the lowest in two weeks on the biggest decrease in more than two weeks. The U.K.’s FTSE 100 Index declined 0.2 percent to the lowest in more than two months. Germany’s DAX Index decreased 1 percent to the lowest in two months on the biggest dip in more than a week. Futures on the S&P 500 Index sank 0.2 percent, the biggest decrease in two weeks. The Topix index rose 0.3 percent while the Nikkei 225 Stock Average rose 0.4 percent after earlier jumping as much as 1.2 percent to touch the highest since 1992.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.