European stocks tumble, led by tech stocks, renewables after Wall Street rout
European stocks fell sharply on Friday led by technology, which echoed a late-session selloff on Wall Street. Profit warnings in the renewables sector sent the shares of two Siemens subsidiaries tumbling.
The Stoxx Europe 600 index
fell 1.4% to 476.48, following a 0.5% gain on Thursday. The index is poised for a nearly 1% drop this week. The German DAX
fell 1.4%, with a similar loss for the CAC 40
while the FTSE 100 index
U.S. stock indexes surrendered an early rebound to turn lower in Thursday’s final hour of trading, a repeat of Wednesday’s volatile session. The worst losses were seen for the Nasdaq Composite
which fell 1.3%, pushing further into correction territory.
Stocks have struggled at the start of the year amid a selloff in bonds as investors look ahead to tighter policy from Federal Reserve. The yield on the 10-year
fell 1 basis point to 1.79%, while the yield on the German 10-year bund
which pushed into positive territory for the first time in three years this week, slipped 1 basis point to negative 0.041%.
A bumpy start to earnings season has also added to the gloom, with Netflix
shares dropping 20% late Thursday, after the streaming giant’s subscriber number outlook fell far short of expectations. S&P 500 futures
were pointing lower, while Nasdaq-100 futures
While tech led the losses in Europe, few sectors showed any green. Among chip names in Europe, heavily weighted ASML Holding
dropped 3%, and ams
shares fell 3%, while business software group SAP
was down 1.2%.
Energy names were under pressure as a risk-off mood hit oil prices
and Royal Dutch Shell
shares fell 1% each.
The renewables sector was getting hammered, after Siemens Gamesa Renewable Energy
late Thursday cut its guidance for the fiscal year, swinging to an operating loss in the first quarter on continued supply-chain woes. Shares slumped 14%.
The warning from its Spanish subsidiary prompted Siemens Energy
to lower its targets for fiscal 2022, and shares tumbled 10%. Those of rival Vestas Wind Systems
Elsewhere, shares of Airbus
dropped 1.5%, after the multinational aerospace corporation canceled a plane order from state-owned carrier Qatar as the two companies have been in dispute for months over surface degradation on A350 jets.