Stoxx 600 Tech Index sinks 4%, worst drop since Brexit vote
European stocks dropped by the most in nearly a month on Monday, fronted by losses in technology shares, while investors held back from buying most U.K. stocks as the British government tried to sort out how to move forward with a hung parliament.
The Stoxx Europe 600 fell 0.8% to 387.23, on track for its largest percentage decline since May 17, according to FactSet data, with only the oil and gas sector showing a gain. Tech, industrial and consumer services shares were losing the most.
Among national indexes, Germany's DAX 30 dropped 0.9% to 12,700.50, and France's CAC 40 fell 1% to 5,247.14.
The Stoxx 600 Technology Index slid 4.5%, the biggest one-day loss since right after last year's U.K. vote to leave the European Union. That slide started after a selloff in the tech sector abruptly kicked off Friday on Wall Street and spilled over Monday into the Asian and European trading sessions.
The technology bellwether Nasdaq Composite Index resumed losses on Monday after tanking nearly 2% on Friday.
See:Pay attention to the ominous pattern in big technology stocks (http://www.marketwatch.com/story/pay-attention-to-the-ominous-pattern-in-big-technology-stocks-2017-06-09)
"Much of the U.S. stock market rally in 2017 has been based on the success and appetite investors have had for Facebook, Alphabet, Amazon, Netflix and Apple -- all of which have risen by between 27% and 34% this year. How long this can be sustained remains to be seen," said David Buik, market commentator at Panmure Gordon & Co. in a Sunday note.
Apple shares (AAPL) fell 3.5% on Monday after the tech heavyweight was downgraded for a second time in a week (http://www.marketwatch.com/story/apple-downgraded-by-mizuho-the-second-ratings-cut-in-a-week-2017-06-12), with Mizuho Securities cutting its rating to buy from neutral.
In Frankfurt, Apple's stock slumped 7.2%.
On the Stoxx 600, Apple suppliers were hit hard. Austrian chipmaker AMS AG (AMS.EB) slid 12.4%, STMicroelectronics NV (STM) sank 9.6% and Dialog Semiconductor (DLG.XE) slid 7.5%.
In London on the benchmark FTSE 100, shares of software companies Micro Focus International PLC (MCRO.LN) and Sage Group PLC (SGE.LN) lose 3.7% and 2.4%, respectively. Those moves helped draw the FTSE 100 down 0.1% to 7,520.87.
Meanwhile, the U.K.'s more domestically focused FTSE 250 fell 0.4%. London-listed stocks struggled as investors watched for developments in the British government after Thursday's general election resulted in a hung parliament.
U.K. Prime Minister Theresa May was scheduled Monday to meet with rank-and-file lawmakers as she faces criticism for her decision to hold a general election that resulted her Conservative Party losing hold of the House of Commons. The snap election took place before the slated June 19 start of negotiations over Britain's exit from the European Union, or Brexit.
May has been working on forming a new government with support from Northern Ireland's Democratic Unionist Party, which holds 10 seats, but no agreement has been struck yet, according to reports Monday.
May and French President Emmanuel Macron were scheduled to meet in France on Tuesday. Macron's upstart party on Sunday won the first round of France's parliamentary elections (http://www.marketwatch.com/story/macrons-party-on-pace-for-landslide-win-in-french-elections-2017-06-11).
Read:Questions grow over Theresa May's future as U.K prime minister (http://www.marketwatch.com/story/questions-grow-over-theresa-mays-future-as-uk-prime-minister-2017-06-12)
And check out:Queen's Speech reportedly delayed as U.K. political uncertainty (http://www.marketwatch.com/story/queens-speech-delayed-as-uk-political-uncertainty-persists-report-2017-06-12)
Among currencies, the pound fell to $1.2662, losing grip of the $1.27 handle. But the euro stepped higher against sterling, buying 88.52 pence compared with 87.88 pence late Friday.
(END) Dow Jones Newswires
June 12, 2017 10:10 ET (14:10 GMT)