European stocks sink on tech, banking fears

Europe's stock markets ended the week with sharp declines Friday, part of a global equities sell-off sparked by poor results from the banking sector and fears of over-valuation in tech. London's FTSE 100 was down 1.21 percent compared to Thursday's closing level, at 6,561.70 points. Germany's DAX 30 shed 1.47 percent to stand at 9,315.29 points and the CAC-40 in Paris lost 1.08 percent to finish the week on 4,365.86 points. European stock markets were already in negative territory in the middle of the trading session as the tech sector continued a global sell-off but losses deepened when Wall Street opened. US shares tumbled at the open after poor earnings results from Wall Street banking giant JPMorgan Chase -- seen as a bellwether stock for the banking sector. JPMorgan shares nose-dived after the firm reported first-quarter earnings of $5.3 billion, down 19 percent from a year ago and missing expectations due to weak trading and mortgage results. Shares of JPMorgan fell 3.2 percent to $55.57 in late-morning trading, making it the weakest-performing stock on the Dow Jones Industrial Average. The miss also pushed shares in Bank of America and Citigroup lower but Wells Fargo, another US banking giant, saw its stock rise after beating earnings expectations. By mid-morning, the Dow had pared its earlier losses and was down 0.45 percent at 16,097.43 points. The tech-heavy Nasdaq also rebounded somewhat and was marginally in the red, down 0.04 percent at 4,052.62 points. The wider S&P500 market was also lower, by 0.26 percent at 1,828.38 points. "The market is just following the selling of tech stocks in the US," said Mikael Jacoby, head of continental European trading at Oddo Securities. "All this is happening against a backdrop of persistent instability in Ukraine," he added. - Fears of tech bubble - On Wall Street, tech stocks continued their sell-off over fears of a new bubble in valuations, but the declines were less marked than on Thursday. Google, Netflix and Facebook all registered declines. European tech stocks were especially badly hit, with shares in German semiconductor giant Infineon diving 1.56 percent to 8.14 euros in Frankfurt. British chipmaker ARM Holdings plunged 4.58 percent to 958 pence in London. And Alcatel-Lucent, a leading global supplier of telecom equipment for the Internet, saw its stock slide 1.85 percent to 2.76 euros in Paris. On Thursday, Wall Street's tech-rich Nasdaq Composite slumped 3.10 percent -- the biggest single-day percentage point drop since November 2011 -- and the Dow Jones Industrial Average shed 1.62 percent. The US losses wiped out a two-day rally that picked up on Wednesday when the minutes of the latest Federal Reserve policy meeting suggested no support for an early rise in interest rates. "With technology valuations double that of other shares, questions are increasingly being asked about whether current earnings justify" the present levels of tech stocks, added Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor. "Whilst these valuation levels are not even close to those seen in previous technology bubbles, investor sentiment appears to have turned for the worse. "The knock-on impact of the sell-off has seen markets fall aggressively and anxious investors are running for cover." - Asia slides into red - The worries spread to Asia on Friday, sending Japan's Nikkei-225 index down 2.38 percent to 13,960.05 points -- its lowest close in six months. Tokyo sentiment was also hit by the Bank of Japan's hawkish view on additional easy money. Shanghai stocks slid 0.18 percent and Hong Kong fell 0.79 percent, dragged down by data showing that Chinese inflation picked up in March but still below forecasts. Elsewhere, Seoul shed 0.56 percent and Sydney dropped 0.95 percent in value. "Asian markets ended in the red on Friday, spooked by the huge sell-off on Wall Street," said analyst Joao Monteiro at trading firm Valutrades. He added: "Shanghai's Composite Index fell too as investors' focus returned to potentially bloated valuations, particularly among so-called 'fast retail', or internet-related companies, and tech stocks." In foreign exchange deals on Friday, the euro rose to 83.06 British pence from 82.75 pence on Thursday, while the pound dipped to $1.6729 from $1.6781. The European single currency rose to $1.3897 from $1.3888 late on Thursday in New York. The dollar rose against the yen at 101.61 compared to 101.55. On the London Bullion Market, the price of gold decreased to $1,318.40 an ounce from $1,320.50 on Thursday.