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European stocks slide as tech sell-off continues on Wall Street

Tom Belger
·Finance and policy reporter
·2-min read
NEW YORK, Sept. 3, 2020  -- Pedestrians walk past electronic screens of the New York Stock Exchange (NYSE) in New York, the United States, Sept. 3, 2020.   U.S. stocks plunged on Thursday, as a steep sell-off in tech shares dragged down the market.     The Dow Jones Industrial Average fell 807.77 points, or 2.78 percent, to finish at 28,292.73. The 30-stock index shed more than 1,000 points, or about 3.5 percent, at the lows.     The S&P 500 fell 125.78 points, or 3.51 percent, to end at 3,455.06. The Nasdaq Composite Index sank 598.34 points, or 4.96 percent, to 11,458.10. (Photo by Wang Ying/Xinhua via Getty) (Xinhua/Wang Ying via Getty Images)
A tech sell-off hit Wall Street on Thursday. Photo: Xinhua/Wang Ying via Getty Images

European stocks tumbled on Friday, as a tech sell-off on Wall Street continued to spook global markets for a second day.

Stocks across the continent wobbled throughout the week’s final day of trading, with two intra-day rallies that quickly faded to leave markets well in the red.

The Europe-wide STOXX 600 (^STOXX) closed down 1.1% after tumbling 1.4% the previous day. Tech stocks on the index shed 2.6%. Germany’s DAX (^GDAXI) was down 1.7% by the end of the day. Britain’s FTSE (^FTSE) and France’s CAC 40 (^FCHI) shed 0.9%.

READ MORE: Sell-off on Wall Street hits European stocks

In the US the tech-heavy Nasdaq (^IXIC), which has rebounded strongly in recent months, again suffered the worst losses on Wall Street, down 2.5% as European markets closed. It had shed 5% on Thursday, its worst daily declines in three months, though losses are still nowhere near erasing its gains since the pandemic hit.

The S&P 500 (^GSPC), which had hit a record high on Wednesday, was down 2% and the Dow (^DJI) lost 1.7% at around 5pm in London (12pm eastern time in the US).

“Thursday’s mini-crash left the door open for more selling, and investors have rushed through it today in a hurry to take profits before more downside arrives,” said Chris Beauchamp, chief market analyst at IG.

“If there is to be a crash then the end of the first week in September, following non-farms and ahead of a long weekend in the US, is probably the perfect time to do it.”

He said the sell-off came in spite of labour market and corporate earnings data in the US on Friday, which were “sending the right kind of message” about the fate of the world’s biggest economy.

“This market selloff still looks like it is in need of an actual reason, apart from the evidently sensible one that what goes up must come down,” said Beauchamp. The tech rally had “simply grown too crowded,” he added.

The sell-off had spilled over into Asian markets overnight. China’s SSE Composite Index (^SSEC) fell 0.9%, Japan’s Nikkei (^N225) lost 1.1% and the Hong Kong Hang Seng (^HSI) lost 1.6%.

Russ Mould, investment director at AJ Bell, noted the conomic backdrop remained “fragile,” with mixed economic data, ongoing concerns over rising unemployment and no sign yet of a vaccine. “The slightest bit of bad news on any of these factors could be enough to cause further volatility in the markets,” he added.

Beauchamp said the market jitters could continue to hit European stocks on Monday, when US markets are closed for the Labor Day public holiday.