Tech stock sell-off spreads to Asian markets

KELVIN CHAN

HONG KONG (AP) — A sell-off of Internet and technology stocks that started on Wall Street spread around the globe on Monday, with tech companies in Asia hammered by worries about excessively high valuations.

Mainstays of the Internet economy such as Google and Netflix that have surged over the past year were hammered on Friday as investors had a change of heart and decided prices were too high. The technology-heavy Nasdaq had its biggest one-day drop since February.

"Perhaps the key equity story now is the horrible price action in the growth stocks, especially ones that trade, or at least did trade, on outrageous valuations," Chris Weston, chief strategist at IG Markets in Melbourne, wrote in a commentary.

In early European trading, Germany's DAX sank 1 percent to 9,602.92 and France's CAC 40 slid 0.5 percent to 4,460.49. Britain's FTSE 100 lost 0.3 percent to 6,672.31. U.S. stocks were poised to fall. Dow futures shed 0.2 percent to 16,324 and broader S&P 500 futures dropped 0.3 percent to 1,855.40.

Asian benchmarks started the week lower as the pessimism about tech companies proved to be contagious.

Japan's Nikkei 225 led regional declines, dropping 1.7 percent to close at 14,808.85. Japanese Internet company Softbank Corp. slid 4.6 percent. Yahoo Japan plunged 5.6 percent and e-commerce firm Rakuten Inc. sank 5 percent

South Korea's Kospi gained 0.1 percent to close at 1,989.70, with gains coming in the final minutes of trading after spending most of the day in the red. Naver Corp., which owns the Line messaging app, tumbled 6.5 percent, and NCsoft Corp., developer of online games such as Lineage, lost 5 percent.

Hong Kong's Hang Seng was down 0.6 percent to 22,377.15. Hong Kong-listed shares of China's Tencent Holdings, which owns the smartphone-based instant messaging service WeChat, fell 4.5 percent. Chinese software maker Kingsoft Corp. slid 6.3 percent.

Australia's S&P/ASX 200 shed 0.2 percent to 5,413.70 while markets in mainland China were closed for a holiday.

Investors this week will be looking ahead to some key releases for further clues on the economic outlook. On Tuesday, they'll be awaiting a policy statement from the Bank of Japan that may reveal whether the central bank will provide further stimulus. On Wednesday, they'll be scrutinizing minutes from the Federal Reserve's policy setting committee.

In currencies, the euro rose to $1.3718 from $1.3703 in late trading Friday. The Japanese yen slipped to 103.22 from 103.26.

In energy trading, benchmark U.S. crude for May delivery was down 53 cents to $100.61 in electronic trading on the New York Mercantile Exchange. The contract rose 85 cents to settle at $101.14 on Friday.