Europe Stocks Slide Most in a Month Amid U.S. Tech Share Selloff

(Bloomberg) -- European stocks dropped the most in a month, led by a retreat in the technology sector on both sides of the Atlantic, as investors exited shares that have led the rally since March.

The Stoxx Europe 600 Index closed down 1.4% in London, after reversing gains of as much as 1.3% earlier. The S&P 500 Index pulled back from a record high amid declines in tech stocks including Apple Inc. and Tesla Inc., down 5% and 6.9% respectively.

European equities had rallied earlier after the French government unveiled a 100 billion-euro ($118 billion) stimulus plan and as the U.S. Centers for Disease Control and Prevention told states to prepare for a Covid-19 vaccine to be ready by Nov. 1.

The Stoxx 600 failed again to stay above its 200-day moving average, a level that analysts say is key for the gauge to overcome to unlock further gains. The euro extended declines, supporting exporters, following a report that European Central Bank policy makers are concerned about the currency’s strength.

Stocks that have done well during the pandemic’s lockdowns caught the worst of the selloff late afternoon, with meal-kit deliverer HelloFresh SE, mobile messaging firm Sinch AB and food delivery platform Delivery Hero SE among the biggest decliners in the benchmark.

There will be “more of a rotation within the market as the marginal dollar is less likely to go and buy a big tech name, which can put pressure on the overall index because these names are so big,” Katherine Davidson, a portfolio manager of global and international equities at Schroders, said by phone.

“We’re underweight the U.S. and overweight Europe,” she said, because of the direction of the currency move, Europe’s handling of the Covid-19 pandemic mostly being better and its political stability.

©2020 Bloomberg L.P.