Technology stock selloff leads global equities decline

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Stocks declined globally on Monday amid a technology selloff and as investors braced for a week packed with risk events, from central bank decisions to a G20 gathering.

The FTSE fell to a 15-month low after the UK and the European Union agreed on a post-Brexit transition period, which boosted the sterling but weighed on the internationally exposed index.

US stocks slumped as tech companies were rattled by weekend reports of major data harvesting from Facebook, as well as Apple’s efforts to develop its own screens.

The Iseq nudged down more than 0.3 per cent in a day of thin trading volumes, with the number of shares exchanging hands dented by the bank holiday to mark St Patrick’s Day.

The Dublin market escaped the brunt of the losses in other European markets in part thanks to a 1.4 per cent gain for Ryanair, which closed up at €16.56, while food group Kerry, another major stock on the Iseq, added 1.1 per cent to finish at €78.90. Cairn Homes was also among the climbers, adding 3.9 per cent to €1.87.

Building materials group CRH declined 1.5 per cent to €27.76, while paper and packaging company Smurfit Kappa fell 1.9 per cent to €35.24

The FTSE 100 fell 1.7 per cent to its lowest level since December 2016, while the more domestically exposed mid cap index limited its decline to 0.6 per cent, after an agreement between the UK and the EU boosted the pound but further hit the blue-chip index.

The market had already been weighed down by a massive drop in Micro Focus. The software company plummeted 46.3 per cent after its chief executive quit and it cut its revenue forecasts.

Big international FTSE stocks like British American Tobacco, BP, HSBC and Diageo were all lower, down between 1.6 and 3.7 per cent, while among companies that benefit from a strong pound, gambling company William Hill rose 4.2 per cent and real estate firm Land Securities added 3.3 per cent.

Barclays jumped 3.6 per cent after activist investor Sherborne acquired 5 per cent of voting rights in the bank.

Mid-cap company Hammerson was a stand-out gainer, up 24 per cent. Shares in the UK retail landlord rose following news of an earlier approach by French shopping centre operator Klepierre.

The tech sector was a bad performer on Monday, with the plunge for London-listed Micro Focus leading technology stocks down 2.5 per cent across the board – the sector’s worst fall since early February when global markets sank.

Europe’s main benchmark, the Stoxx 600 index, fell 1.1 per cent as investors held their breath ahead of Wednesday’s US Federal Reserve meeting, which marks the debut for new chairman Jerome Powell and a likely interest rate increase.

The French Cac 40 was down 1.1 per cent, while the German Dax finished 1.4 per cent lower. Disappointing results weighed on German consumer goods firm Henkel, which fell 2.3 per cent after it said the first quarter was off to a slow start.

New York
US stocks were trading about 2 per cent lower in the first half of trading on Monday, with Dow Jones Industrial Average shedding nearly 400 points, as Facebook led a selloff in technology stocks on reports that the social media company’s user information was misused.

Facebook shares tumbled 7.1 per cent, putting it on track for its worst day since September, 2012. It was also down about 13 per cent from its all-time high hit on February 1st, meaning it entered what is called correction territory.

Republican Senator Marco Rubio said he believed some internet companies have grown too fast to digest their responsibilities and obligations. Amazon, Apple, Netflix and Alphabet – members of the so-called FAANG group of stocks alongside Facebook – were also in the red.

(Additional reporting: Reuters / Bloomberg.)

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