Tech Companies Lead Sell-off in Europe

European stocks on Wednesday was led by a sell-off of technology companies.

The STOXX 600 benchmark index slid 1.1 percent, with the technology sector leading the decliners. Facebook fell a further 2.5 percent as privacy concerns continued and in Europe STMicro and Infineon chipmakers were the top fallers.

For the first time since January German bond yields declined 0.5 percent, putting added pressure on the banking sector. Commerzbank, Credit Suisse and UBS led the biggest fallers which helped bond yields to outperform.

Concerns of a Further Sell-off

There are concerns of a further sell-off in the technology sector due to an increase in regulation following the suspension of car tests for self-driving cars by chipmaker Nyidia Corp. The suspension came after a Uber autonomous vehicle killed a woman in Arizona. In another separate incident Tesla electric car maker shares fell on Tuesday following a fatal crash, prompting a U.S. federal investigation.

Alexandre Baradex, analyst at IG said that the increasing bad news surrounding semiconductors has led to concerns around the functioning and testing of autonomous vehicles.

Whilst UniCredit also said that the sell-off in the U.S. Tech sector has been trigged by the recent stream of negative news and is the underlying cause.

European and U.S. technology stocks over the last year are up 2.5 percent and are among the best performers.

Europe’s utilities index gained 0.2 percent with Britain’s United Utilities gaining 3.1 percent after CFRA upgraded them from a hold to sell.

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