Index futures sell-off led by tech sector underperformance
(Kitco News) - The Dax 4-hour futures chart below shows the extent of the sell-off in the European session this morning and it now trades over 2% lower.
This has been led by the tech sector as even the Nasdaq saw outflows over the last 48 hour period. Infineon, Siemens and SAP are among the worst 5 performing companies in the index but the selling pressure has been pretty broad-based.
Inflation pressures seem to be taking their toll as higher costs could hit the bottom line of some off the biggest businesses. In the UK earnings have also not helped matters as HSBC Holdings dropped 1.5% after its annual profits dropped sharply due to the COVID-19 pandemic and it was reported the firm unveiled a revised strategy focused mainly on wealth management in Asia.
Sticking with earnings, Fresenius shares fell after the firm narrowed down its 2021 sales growth forecast and said it would launch a cost-cutting program. Adding to this, HeidelbergCement tanked 2.3% even after preliminary results showed core profit was up 6% last year.
A rise in US yields has also meant there is some market repricing but the focus later on will be on Fed Chair Powell's testimony. He could provide some clarity over the taper tantrum that the market is currently facing. The US 10 year yield is currently trading at 1.357%, near the yearly highs.