Global Tech Stocks Index Hits Record High

World tech stocks hit a record high on Tuesday, June 5, triggered by a new all-time peak for Apple, a 17-year top for European tech firms and news that Twitter and Netflix were set to join Wall Street’s flagship S&P 500 index.

MSCI’s global tech index scored the milestone after the FAANGs — Facebook, Apple, Amazon, Netflix and Google — drove the technology-heavy Nasdaq to a new closing high in New York on Monday.

That then raised Asia’s big BATTS — Baidu, Alibaba, Tencent, Taiwan Semiconductor, Samsung — with Alibaba notching a new high and Baidu surging 5 percent for its best day in more than a month.

Europe got in on the act too as tech stocks there jumped more than 1 percent in a third day of gains that took them to their highest since the dot-com boom of 2001.

“The market is being pushed up by just a few huge companies,” said Jerome Schupp, equity analyst at Prime Partners in Lausanne.

“All big names from Apple to Amazon and Microsoft are able to make huge buybacks and acquisitions, and the internal growth of most of these companies is pretty in line with expectations.”

Moves in other markets were modest or centred around growing nervousness about global trade tensions.

The dollar, the euro and yen largely cancelled each other out, but the dollar made 0.6 percent on Mexico’s peso after Mexico said it would impose a 20 percent tariff on U.S. pork imports in retaliation for U.S. levies on steel and aluminium.

There was some selling of Italian government bonds again too after their rebound of the last few days and as traders waited for the country’s senate to hold a confidence vote later on Giuseppe Conte’s appointment as prime minister.

Market participants will also be keeping an eye on a speech by ECB President Mario Draghi for any indication of how the political developments in southern Europe may affect monetary policy.

Other euro zone government bond yields were 1-2 basis points lower, as a measure of calm returned to the market.

Germany’s 10-year government bond, the benchmark for the bloc, saw its yield drop 1.5 bps to 0.40 percent, while the 10-year U.S. Treasury note yield stood near the 11-day high of 2.946 percent brushed overnight.

Spain also saw a change of government last week, with socialist Pedro Sanchez replacing conservative Mariano Rajoy. Investors assessed the likelihood of another election there as low, which kept a lid on volatility.

Asia’s moves overnight saw Japan’s Nikkei gain 0.2 percent, Hong Kong’s Hang Seng climb 0.15 percent and the Shanghai Composite Index rise 0.25 percent after data showed China’s services sector expanding at a steady pace, Reuters reports.

 

 

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