Global markets extend slide as tech fears mount

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Worries about demand for Apple handsets are weighing on tech stocks (AFP Photo)
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AFP

London – European and Asian stock markets tipped lower on Tuesday after heavy falls on Wall Street, hit by technology sector woes, dealers said.

After a brief couple of days of stability, jitters have returned to the world’s trading floors following a report that the US titan Apple had slashed production of its most popular handsets.

That comes just a week after a supplier suggested the firm had cut orders, fanning speculation the latest incarnation of the gadget is not selling as much as hoped.

New York stocks had tumbled on Monday, with the Nasdaq crumbling on worries about flagging growth among tech giants and US-China trade tensions.

Apple collapsed 4% with Facebook, Amazon, Google parent Alphabet and Microsoft each diving 3% or more.

The losses filtered through to Asia, where Apple suppliers were also in trouble.

The arrest of Carlos Ghosn, who is credited with rescuing Nissan, sent shares in the firm plunging with Mitsubishi in Tokyo (AFP Photo)

In addition, Japanese car giants Nissan and Mitsubishi plunged on news that chairman Carlos Ghosn had been arrested over alleged financial misconduct.

Markets also remain pressured by the uncertain US interest rate outlook and political uncertainty over both Brexit and Italy’s fiscal troubles.

“A sea of red across equity markets suggest we are heading for another turbulent session as investors come to terms with another sell-off on Monday and an increasingly wobbly tech sector,” said Oanda analyst Craig Erlam.

“There still appears to be a lot of underlying anxiety in the markets which may prolong the current sell-off a little longer – with trade wars, the pace of US interest rate hikes, Brexit and the Italian budget standoff all being significant headwinds.”

Markets were also well down as attention starts to turn to next week’s G20 summit in Argentina, where Donald Trump is expected to meet Chinese President Xi Jinping to talk trade.

‘Existential threat’

In Asia, Nissan lost 5.5% and Mitsubishi sank 6.9% as they prepared to sack Ghosn after it emerged he had been taken into custody as detectives looked into claims he under-reported his income for years.

Ghosn has long been a major player in the car industry and is credited with resurrecting the once-troubled Nissan, which he allied with Mitsubishi and France’s Renault.

He heads the Renault-Nissan-Mitsubishi alliance and serves as CEO of Renault.

“Ghosn’s departure could be an existential threat for all three companies,” noted Professor Andre Spicer at City, University of London.

“Ghosn had built a complex alliance between three auto-makers,” he told AFP.

“However, the only thing holding it together was Ghosn. With him out of the picture, old differences between the companies could come to fore.”

Renault’s share price sank 2.1% in midday Paris trade, extending Monday’s 8% dive.

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