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GLOBAL MARKETS-Tech stocks pull down equity markets, euro gains

Published 2018-07-30, 12:57 p/m
© Reuters. GLOBAL MARKETS-Tech stocks pull down equity markets, euro gains
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* Investors await Japan, UK, U.S. central bank decisions

* U.S. tech decline pulls down Wall Street, global equities

* Euro recovers ground against the dollar

* Oil prices rise on tighter supply expectations

By Herbert Lash

NEW YORK, July 30 (Reuters) - The dollar slipped against the euro on Monday ahead of key central bank monetary policy meetings this week and a gauge of global equity markets fell, pulled down by a slide in U.S. technology heavyweights.

Most major currencies stuck to narrow trading ranges as the Bank of Japan ends a two-day meeting on Tuesday, the Federal Reserve concludes its policy meeting on Wednesday, and the Bank of England is expected to raise interest rates on Thursday.

Shares in Europe fell, led by a 2.9 percent decline in software maker SAP SE SAPG.DE , with the FTSEurofirst 300 index .FTEU3 of leading European shares closing down 0.26 percent.

MSCI's all-country world stock index .MIWD00000PUS fell 0.22 percent, pulled lower by marquee tech stocks Facebook FB.O , Microsoft MSFT.O , Amazon.com AMZN.O and Netflix NFLX.O .

Stocks on Wall Street also were lower on the tech sell-off.

The Dow Jones Industrial Average .DJI fell 52.6 points, or 0.21 percent, to 25,398.46. The S&P 500 .SPX lost 9.01 points, or 0.32 percent, to 2,809.81 and the Nasdaq Composite .IXIC dropped 77.91 points, or 1.01 percent, to 7,659.51.

Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee, said earnings reports from Facebook, Amazon and Netflix suggested that the so-called FAANG group of stocks had reached a saturation point.

Industrials, energy and materials led gainers on Wall Street, with Caterpillar Inc (NYSE:CAT) CAT.N raising its full-year outlook after second-quarter earnings nearly doubled and beat expectations, helped by robust global demand for its equipment. revival in global growth may help lift stocks as the market leadership that technology shares have held fades, said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

"You're seeing a change in leadership in the market and that's the underlying story here. Energy, financials, materials and industrials are the early leaders," Arone said.

The S&P energy sector .SPNY jumped 0.85 percent as oil prices gained, with investors remaining cautious over the supply outlook and a potential hit to global output due to U.S. sanctions on Iran. crude CLcv1 rose $1.38 to $70.07 a barrel while Brent LCOcv1 was last up 66 cents at $74.95.

The dollar slipped the most against the euro, with the common currency 0.51 percent higher as it recovered from its worst weekly performance against the greenback in six weeks. The euro suffered sharp losses last week after the European Central Bank reaffirmed that rates would stay low through next year's summer. said the euro's rebound was largely because traders felt it had been oversold last week.

The dollar index .DXY fell 0.39 percent, while the Japanese yen JPY= strengthened 0.05 percent versus the greenback at 111.00 per dollar.

Euro zone government bond yields rose after a strong Italian auction boosted demand for Italian debt at the expense of higher-rated markets in the bloc. for the upcoming Bank of Japan meeting as well as German and Spanish inflation data remaining slightly above the ECB's price stability target in July also put upward pressure on yields, analysts said. 10-year government bond yield DE10YT=RR , the benchmark for the euro zone, rose more than 4 basis points to a six-week high of 0.46 percent.

Yields on U.S. Treasury bonds rose, with the benchmark 10-year at a six-week high, as investors sold government bonds on growing speculation that the BOJ may adjust its ultra-loose monetary policy at its meeting.

U.S. benchmark 10-year notes US10YT=RR were down 2/32 in price to yield 2.9691 percent.

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