Global tech-driven market sell-off persists

Associated Press
A man walks by an electronic stock price indicator showing the regional heavyweight, Tokyo's Nikkei 225, that shed 201.97 points, or 1.36 percent and closed at 14,606.88, in Tokyo Tuesday, April 8, 2014. Asian stock markets were mixed Tuesday after Japan's central bank refrained from expanding its stimulus and declines in tech stocks weighed on prices. (AP Photo/Eugene Hoshiko)
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LONDON (AP) — The Nasdaq-inspired sell-off dragged across global markets on Tuesday despite a modest rebound on Wall Street ahead of the start of the quarterly corporate earnings season.

The market tone has been largely set by Wall Street since Friday as many investors became worried that the valuations of technology, Internet and biotech stocks had gone too high. The onset of the latest results season has helped focus minds in that regard. Aluminum company Alcoa kicks it off after the markets close Tuesday.

"The surprise is that it's taken investors so long to catch onto the fact that a lot of high growth stocks are trading on stupidly high valuations as companies like Twitter, Facebook, Pandora and Zynga continue to get pummeled," said Michael Hewson, chief market analyst at CMC Markets.

In Europe, the FTSE 100 index of leading British shares closed down 0.5 percent at 6,590.69 while Germany's DAX fell 0.2 percent to 9,490.79. The CAC-40 in France was 0.3 percent lower at 4,424.83.

In the U.S., stocks recovered their poise, particularly on the tech-heavy Nasdaq, which over the past three sessions had fallen nearly 5 percent and below its 100-day moving average. On Tuesday, it was up 0.6 percent at 4,103. Elsewhere in the U.S., the Dow Jones industrial average was up 0.1 percent at 16,266 while the broader S&P 500 index rose 0.2 percent to 1,849.

Brenda Kelly, chief market strategist at IG, said the imminence of U.S. earnings season may be playing a part in the more solid performance on Wall Street.

"Investors might believe there is still plenty of room for growth in the U.S. economy, and thus lots of mileage left in the tank for the stock market rally, but it appears they'd rather sit on the sidelines unless, and until, a clear trend from the upcoming reporting period emerges," she said.

Investors are also keeping a close watch on developments in eastern Ukraine. On Monday, pro-Russian separatists seized a provincial administration building in the eastern Ukrainian city of Donetsk and proclaimed the region independent — an echo of events prior to Russia's annexation of Crimea. Though Ukrainian authorities say they are driving them out, tensions remain.

Those geopolitical tensions are evident in the currency markets where the yen, as is often the case, advances during times of concern. The dollar was down 1 percent at 102.08 yen.

The yen's appreciation contributed to a hefty 1.4 percent fall in Tokyo's Nikkei 225 index to 14,606.88. The decision by Japan's central bank to leave its policy unchanged also weighed on sentiment as some traders had been hoping for more stimulus in the wake of a the rise in the sales tax hike from 5 percent to 8 percent.

Elsewhere, following a public holiday, China's Shanghai Composite Index added 1.9 percent to 2,098.28. Hong Kong's Hang Seng gained 1 percent to 22,596.97. Seoul's Kospi added 0.2 percent to 1,993.03.

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