Global Shares Decline Amid Tech Weakness -- Update

By Riva Gold and Ese Erheriene Features Dow Jones Newswires

German 10-year bund yield climbs to 0.4%

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-- Stock markets in Europe and Asia extend losses

-- Tech companies remain under pressure

Stocks in Europe and Asia extended losses Wednesday amid pressure on technology companies, while the euro and government bond yields climbed as investors reassessed the course of eurozone monetary policy.

The Stoxx Europe 600 was down 0.4% late morning but was off its worst levels of the day, following declines in Asian markets. Europe's technology sector shed 1.2% and Asian tech companies moved lower following declines in their U.S. counterparts, which helped the Dow Jones Industrial Average and the S&P 500 post their biggest daily declines in more than a month.

Futures pointed to a small opening gain for the S&P 500 on Wednesday but Nasdaq-100 futures remained down 0.4%.

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After double-digit percentage gains so far this year, "Everybody remembers the [year] 2000 slipping of the tech sector," said Jae Yoon, chief investment officer at New York Life Investment Management. "But I have no concerns about tech valuations," he said, noting that in terms of price-to-earnings metrics, the sector is trading much closer in line to the S&P 500 than it did at its peak.

Analysts also said Senate Republicans' decision to delay a vote on their health-care overhaul added to investors' doubts about President Donald Trump's ability to push through other policies such as a tax shake-up, weighing down stock markets.

"As each day goes by, it's clearer that maybe not much is going to get done...companies where Wall Street analysts have factored in tax cuts into their numbers look a bit vulnerable," said Phil Smeaton, chief investment officer at Sanlam.

In Europe Wednesday, export-heavy indexes grappled with a stronger local currency, with the euro last up 0.2% at $1.1365, around its highest since the June 2016 U.K. referendum on European Union membership.

The euro posted its best day against the dollar in a year and bond yields climbed Tuesday after European Central Bank President Mario Draghi hinted that the bank might start winding down its massive stimulus program in response to a pickup in the eurozone economy.

"The speech seemed to mark a transition from the 'whatever it takes' period to 'it will take less' and a potential slow turning point in the direction of travel toward tighter policy," said Jim Reid, strategist at Deutsche Bank.

The euro has risen 8.1% against the dollar so far this year just as expectations for the Federal Reserve to tighten policy have waned, making it among the strongest-performing currencies.

Investors have sold government bonds this week amid worries their value might fall if the central bank starts reducing its massive bond-buying program sooner than expected. Yields on 10-year German bunds continued to rise Wednesday to 0.398% from 0.342% on Tuesday, which marked their biggest daily gain since 2015, while Treasury yields climbed to 2.252% from 2.198%. Yields move inversely to prices.

Mr. Draghi is scheduled to appear again later Wednesday on a panel in Portugal, as some investors remain skeptical of the market moves that followed Tuesday's speech.

"The ECB president has made comments like this before, only for the broader ECB to back off from actually taking any action," said strategists at RMB Global Markets.

Elsewhere in European stocks, banks and insurers were among the best performers, as they tend to benefit from rising interest rates and higher bond yields. Shares of Rosneft and WPP also inched higher, recovering from losses Tuesday as cyberattacks wreaked havoc across Europe and the U.S.

Asian equities closed mostly lower, tracking declines on Wall Street. Korea's Kospi's IT subindex slid 2.3% while Taiwan's Taiex was off 1.2%, echoing the selloff in U.S. technology companies.

Japan's Nikkei Stock Average fell 0.5% but higher sovereign-debt yields supported shares of Japanese insurers which are heavy buyers of such securities.

Australia's S&P/ASX 200 was up 0.7% helped by gains in banks and resources companies following a recovery in iron-ore futures and base metals prices.

Write to Riva Gold at riva.gold@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

June 28, 2017 07:33 ET (11:33 GMT)