World stocks slip as tech shares crumble after Dow breaks 22,000

World stocks fell on Thursday, led by a tumble in tech shares as investors locked in recent gains after Wall Street’s Dow Jones Industrial Average broke the 22,000 barrier for the first time in its 121-year history.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7 percent, with South Korea’s tech-heavy Kospi index slumping 1.7 percent to its lowest level in over three weeks. Seoul shares took an additional hit from President Moon Jae-in’s new tax plan.

Japan’s blue-chip Nikkei stock index closed down 0.3 percent.

European stock markets opened broadly lower, Germany’s DAX slipping 0.6 percent and France’s CAC 0.4 percent lower. Britain’s FTSE was down 0.2 percent.

“We haven’t seen a major correction in tech shares so far this year so they may be hitting a speed bump,” said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.

In New York overnight, the Dow Jones Industrial Average topped the 22,000 mark for the first time on the strength in Apple shares following its earnings.

But as the positive impact faded, investors were encouraged to take profits.

Samsung Electronics, which last Friday posted its biggest daily fall since October, slid 2.5 percent, giving up the gains made so far this week. SK Hynix dropped more than 3 percent.

Technology stocks in Europe slipped 0.3 percent.

“I don’t see too much in the way of downside for European stocks because economic data is strong – take a look at the Italian data today,” said Michael Hewson, chief market analyst at CMC Markets.

Data on Thursday showed Italy’s service sector posted its fastest growth for a decade in July, boosting prospects for economic output in the euro zone’s third-largest economy.

Dollar Edges Up

In currency markets, the dollar inched away from a 15-month low versus a basket of currencies, but was still looking wobbly due to doubts about whether there will be another U.S. interest rate rise this year.

U.S. inflation has been contained even as the labor market appears to be in its best shape in many years, with the jobless rate staying near a 17-year low.

Friday’s closely watched government employment report could provide more clues on the economic outlook.

The dollar index, which measures the greenback’s value against a basket of six major currencies, rose about 0.12 percent to 92.951. On Wednesday, it slid to 92.548, its weakest level since May 2016.

The euro was a touch weaker at $1.1841, after rising to around $1.1911 on Wednesday, its highest level since January 2015.

Britain’s pound held near Wednesday’s 11-month high of $1.3250 ahead of a Bank of England interest rate decision. The central bank will also release its latest inflation report.

The BoE is expected to keep interest rates at a record low. When they last met in June, rate-setters voted by a narrow 5-3 margin to keep Bank Rate at 0.25 percent.

The surprisingly close decision pushed up sterling and British government bond yields as investors pulled forward their expectations of a rate hike.

Oil prices dipped as a rally that pushed up prices by almost 10 percent since early last week lost its momentum, despite renewed signs of a gradually tightening U.S. market.

Brent crude futures slipped 0.8 percent to $51.94 per barrel, not far from Wednesday’s high of $52.93, its highest level in 10 weeks.

Source – Reuters

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