World stocks lost on Monday, with European stocks plunging the most since October as technology firms suffered sell offs. Brent crude fell as Spanish and Italian bonds dropped.
The NASDAQ saw its worst fall since February on Friday as investors continued selling off their stakes in high-flying and rapid-growth technology and biotechnology companies on concerns that they are overvalued. The trend of stocks decline stretched into Asia on Monday, affecting Japanese stock shares.
The drop followed record peaks registered by the Dow and S&P 500 after a US payroll report improved investor confidence in the pace of recovery of the US economy while soothing fears the Fed would hike rates early.
According to Bloomberg, MSCI index that gauges all countries dropped 0.3% as of 7:20 am in New York. The Stoxx Europe 600 Index dropped 1% while the Standard & Poor’s 500 Index futures slid 0.5%. The Nasdaq 100 Index futures plunged 0.9%.
Stoxx 600 lost five shares for every one that rose, with trading volumes for the day 15% lower than the 30-day mean. Shares of technology firms fell 1.7%, the worst loss among 19 tech firms.
World shares had seen a winning streak for three weeks as easing tensions in Crimea got investors adding risks.
“Markets are overbought over the short term. We have seen a decent run after the Crimean situation cool down a little bit and now it’s quite natural to see a breather from that level,” said Baader Bank’s chief of equity strategy Gerhard Schwarz.
Japan’s Nikkei 225 lost 1.6% as high-flying Softbank led the index’s plunge after dropping more than 4%.
As Reuters reports, Softbank’s stocks have proved susceptible to developments in US stocks before Alibaba’s initial public listing, which is poised to hit a historical magnitude. Softbank controls 37% shares of one of the largest e-commerce firms in China.
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