European shares hit by tech sell-off; Shire rallies

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© Reuters. FILE PHOTO: The German share price index, DAX board, is seen at the stock exchange in Frankfurt© Reuters. FILE PHOTO: The German share price index, DAX board, is seen at the stock exchange in Frankfurt

MILAN (Reuters) – Technology companies led European stocks lower in early trading as persistent concerns over a regulatory crackdown on big tech and a string of negative headlines overnight hit sentiment towards the sector that drove a long bull market.

The pan-regional STOXX 600 () index was down 1.1 percent by 0749 GMT, with tech stocks () leading sectoral fallers, down 2.6 percent, after shares in Facebook (NASDAQ:) fell further on continued privacy concerns. [nL8N1R928E]

A further fall in bond yields also put pressure on the heavyweight banking sector.

Shares in electric car maker Tesla (NASDAQ:) tumbled on Tuesday after a fatal crash and fire of a Tesla car prompted a U.S. federal field investigation. Twitter tumbled after short-seller Citron Research called the stock “most vulnerable” to privacy regulations. And chipmaker Nvidia Corp (O:) said it suspended self-driving car tests across the globe, a week after an Uber Technologies Inc autonomous vehicle struck and killed a woman crossing a street in Arizona.

Tech was a key driver behind a rally to record highs in global equity markets and investors are concerned that an increase in regulation could spark a further sell-off.

Top fallers among European tech stocks were chipmakers ams (S:), STMicro (MI:) and Infineon (DE:), all down between 2.8 and 4.4 percent.

“A recent stream of negative news has acted as a trigger for the sell-off in the U.S. tech sector. But the underlying cause… is extremely stretched valuation metrics that have generated a sizeable misalignment with fundamentals, mostly for the big technology stocks,” said UniCredit in a note.

Among banks, big decliners included Commerzbank (DE:), UBS (S:) and Credit Suisse (S:), which all declined more than 1 percent, after German bond yields fell below 0.5 percent for the first time since early January. [nL8N1RA12V]

Among gainers, Shire (L:) was up 4.3 percent, with traders citing an upbeat broker note.

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