European stocks rose on Friday after falling on Wall Street overnight led by heavy selling of Apple and other technology stocks.
The more steady trading came after the rally in US stocks came to a sudden halt the previous day, as stocks in the largest US technology group fell sharply after staggering gains in recent weeks.
The MSCI broad gauge of stocks in developed and emerging markets fell 0.1 percent on Friday as modest gains in Europe were balanced by declines in several Asian markets. The gauge tumbled 2.5 percent on Thursday, in the heaviest selling since June.
Wall Street stocks were preparing to stabilize, with S&P 500 futures mainly stabilizing in European trading and futures, with the technology-focused Nasdaq 100 index dropping just 0.3 per cent after earlier sharp falls.
Analysts and investors said the heavy sell-off in the United States on Thursday marked a healthy reversal after the sharp gains from March’s lows that have seen the S&P 500 climb nearly 7 percent since the end of 2019.
“It just doesn’t look like a profit taking.” Robert Carnell, Head of Asia Pacific Research at ING, said, “The profits are huge, I give it to you.” This was not the turnover of stocks in bonds … this is not the return of “risk”.
In Europe, the continent-wide Stoxx 600 index rose 0.3 percent in early trade on Friday, with markets in London, Paris and Frankfurt recording similar gains. Markets in Asia recorded a stronger performance as the Australian S & P / ASX 200 index lost 3 percent.
The Hong Kong Hang Seng Index, which is sensitive to movements on Wall Street, fell 0.8 percent, and the Chinese CSI 300 Index of Shanghai and Shenzhen-listed shares fell 1 percent.
Big tech stocks suffered hard on Thursday, with Apple falling 8 percent, wiping more than $ 150 billion from the company’s market value. Amazon, Alphabet, and Microsoft ended Thursday’s session down more than 4 percent.
The sell-off in US tech stocks extended to tech companies in China, with e-commerce conglomerate Alibaba down 6.7 percent and rival Tencent down 3.9 percent.
Investors and analysts have expressed growing concern that the monetary and fiscal stimulus has pushed stocks to unsustainable levels. Assessments appear to be stretching as the pandemic continues to spread and there is no Covid-19 vaccine in sight while the impending US presidential election in November adds to volatility.
“Corrections are expected in the market,” said Keri Craig, global market strategist at JPMorgan Asset Management. A market fueled by central bank generosity, economic surprises and record profits [performance] The last few months will not maintain its heady pace forever. ”
The dollar, which has weakened significantly during the pandemic, is trading steadily, with the main measure of its performance against the currencies of trading partners holding steady at 92.8, the lowest in nearly two years.
US government bond prices fell slightly in the run-up to the US payroll data, which is scheduled for release at 8.30am New York time. The yield on the benchmark 10-year Treasury note increased by 0.02 percentage point to 0.638 percent.