Fears as billions wiped off tech stocks
Fears that some of the world's biggest technology companies could be over-valued have triggered the biggest market sell-off in a year.
Billions of dollars have been wiped off the value of big name stocks - including the likes of Apple, Facebook and Google - as well as European and Asian microchip makers since Friday amid investors' concerns about the sustainability of valuations across the sector if global growth falters.
Up to last week, technology shares had been the darling of the markets, helped by a string of recent financial results.
But share prices took a hit on Friday, in part after Apple dipped on speculation that the company is using slower modems in upcoming iPhones, which would make it vulnerable to rivals. That concern spread to other companies and to Europe and Asia yesterday.
The initial rout hit US internet stocks after Robert Boroujerdi, the global chief investment officer at Goldman Sachs, warned that low volatility in Facebook, Amazon.com, Apple, Microsoft and Google parent Alphabet may be blinding investors to risks in the sector such as cyclicality and regulation.
The comments triggered a slide in share prices that went global yesterday.
"There's a chance US internet technology stocks that have propelled a global stock rally will now serve as a buzz kill," said Mitsuo Shimizu, deputy general manager at Japan Asia Securities in Tokyo.