(Bloomberg) — Global stocks struggled on Friday as outages in global computer systems hit travel, commerce and banking services, threatening to add to the rout in tech stocks.
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Cybersecurity firm Crowdstrike Inc. It fell as much as 21% in US premarket trading after it warned that its software could crash computer systems. Its chief executive later said the problem had been identified and “a fix is being applied”. Microsoft Corp shares fell 2%, although it said it had resolved an earlier cloud services outage.
However, contracts on the Nasdaq 100 and S&P 500 indices pared earlier losses to trade just 0.1% lower. In Europe, the Stoxx 600 index fell 0.5%, falling for a fifth straight day. Shares of Air France-KLM, Ryanair Holdings plc and other airlines fell as flights were grounded or delayed. LSE Group Plc, which operates the London Stock Exchange, recovered some of its share price losses after it said technical problems prevented the news from being published.
The disruptions came at the end of a week that saw the tech-heavy Nasdaq up more than 3% as investors moved out of high-flying megacap names and into smaller companies. The Russell 2000 index rose 2.3% this week.
Market losses fueled by the shutdown are unlikely to last, said Rajeev De Mello, chief investment officer at Gamma Asset Management, adding that investors “may be risk-buying such a sell-off, especially in the low-liquidity summer trade, and on Friday.”
“However, the cycle in the equity sector is brutal and may continue for some time,” he added.
Recent moves to smaller, lower-rated sectors have been accelerated by signs the Federal Reserve may cut interest rates in September – confirmed by Thursday’s data showing the largest increase in jobless claims since early May – as well as a greater chance under protectionism. A possible Donald Trump presidency.
“From a bigger picture perspective, the Fed moving towards a rate cut and the odds of Trump increasing should be risk positive,” said Mohit Kumar, strategist at Jefferies International Ltd. “But it also means investors are reassessing their asset and sector allocations as we head into the summer months. Heavily positioned sectors have suffered in the correction.
Sartorius AG fell 13% after the German electronics maker cut full-year guidance as quarterly earnings continued to trickle. Computer-games maker Ubisoft Entertainment SA fell more than 8% after missing full-year targets, while gaming giant Evolution AB also fell after missing its revenue estimates.
In the US, Netflix Inc. The streaming-video company slipped in premarket trading after missing expectations.
Earlier in the day, MSCI’s Asia Pacific index fell more than 1%, set for its biggest weekly drop in three months, as fears of US restrictions on sales to China weighed on chip stocks.
Highlights of this week:
Some key movements in the markets:
Shares
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The Stoxx Europe 600 was down 0.5% as of 11:53 a.m. London time.
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S&P 500 futures were little changed
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Nasdaq 100 futures fell 0.1%
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Futures for the Dow Jones industrial average fell 0.2%
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The MSCI Asia Pacific index fell 1.4%
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The MSCI emerging market index fell 1.6%
Coins
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The Bloomberg Dollar Spot Index was little changed
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The euro fell 0.1% to $1.0884
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The Japanese yen was little changed at 157.44 per dollar
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The offshore yuan was little changed at 7.2844 per dollar
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The British pound fell 0.2% to $1.2915
Cryptocurrencies
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Bitcoin rose 0.3% to $64,014.3
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Ether fell 0.4% to $3,399.97
Bonds
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The yield on 10-year Treasuries was little changed at 4.20%.
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Germany’s 10-year yield rose one basis point to 2.44%
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Britain’s 10-year yield rose three basis points to 4.09%
materials
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Brent crude was down 0.2% at $84.91 a barrel
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Spot gold was down 1.3% at $2,412.16 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Ju Lin, John Cheng, Winnie Hsu and Divya Patil.
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