Global stock markets fell on Monday, led by technology shares, as investors look ahead to policy meetings this week by the central banks of the U.S., Britain and Japan.
KEEPING SCORE: France’s CAC 40 dropped 1 percent to 5,247, while Germany’s DAX dropped 0.9 percent to 12,703. Britain’s FTSE 100 fell 0.1 percent to 7,518. U.S. shares were set to drift lower, with Dow futures slipping 0.2 percent and S&P 500 futures 0.3 percent lower.
TECH SELL-OFF: A drop in technology stocks in the U.S. on Friday echoed through markets on Monday. In Germany, Infineon Technologies was down 5 percent and SAP 3.5 percent. Finland’s Nokia was down 2.8 percent. Investors seem spooked the prospect that tech stocks might be overpriced after months of strong gains. The Nasdaq fell 1.8 percent on Friday.
CENTRAL BANKS: Looking ahead, market players are watching central banks’ meetings in Britain and the U.S. later this week. Analysts say the Fed is likely to raise interest rates, while the Bank of England is expected to keep them unchanged. The Bank of Japan is also meeting on monetary policy later this week, but little is expected to impact markets, they say.
THE QUOTE: “The start of the week may be quiet, but we’ll get monetary policy decisions from the Federal Reserve, Bank of England and Bank of Japan on Wednesday, Thursday and Friday, respectively. The Fed will be of particular interest with markets now fully pricing in a rate hike and instead more concerned with whether they’ll signal another this year or focus more on balance sheet reduction,” said Craig Erlam, senior market analyst at OANDA.
ASIA’S DAY: Japan’s benchmark Nikkei 225 slipped 0.5 percent to finish at 19,908.58. South Korea’s Kospi slipped 1.0 percent to 2,357.87. Hong Kong’s Hang Seng lost 1.3 percent to 25,703.83, while the Shanghai Composite index dipped 0.6 percent to 3,139.88. Trading was closed in Australia for a national holiday.
ENERGY: Benchmark U.S. crude added 74 cents to $46.57 a barrel. It had gained 19 cents on Friday. Brent crude, used to price international oils, added 85 cents to $49.00 a barrel in London.
CURRENCIES: The pound continued to drop after falling over 2 percent versus the dollar after the Conservatives lost their majority in Parliament. The vote’s outcome is creating disarray in Britain’s negotiations to leave the European Union, due to start June 19. The pound was down at $1.2680, from $1.2721 on Friday. The dollar weakened to 109.88 yen from 110.36 late Friday. The euro strengthened to $1.1221 from $1.1182.