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The
MSCI world equity index <.MIWD00000PUS>, which tracks shares in
47 countries, was flat in percentage terms by 0901 GMT, while
the pan-European STOXX 600 <.STOXX> equity index slipped 0.1
percent.
Tech <.SX8P> stocks underperformed in Europe as the sector fell
0.3 percent, taking its cue from Monday's falls for U.S. peers
on the back of fears of stiffer regulation as Facebook came
under fire following reports it allowed improper access to user
data.
Shares in European chipmakers in particular came under pressure,
with ams <AMS.S>, STMicroelectronics <STM.MI> and ASML <ASML.AS>
all in negative territory, while Germany's SAP <SAPG.DE>
declined 0.5 percent, hit by readacross from U.S. business
software peer Oracle Corp, whose quarterly revenue missed
analysts' estimates.
In the U.S., Facebook <FB.O> tumbled 6.8 percent on Monday as
the social media colossus faced demands for action from U.S. and
European lawmakers following reports that a consultancy that
worked on President Donald Trump's election campaign may have
improperly gained improper access to data on 50 million Facebook
users.
Likewise an accident involving an Uber Technologies Inc
<UBER.UL> car on Monday which resulted in the first fatality
involving a fully autonomous vehicle further weighed on
sentiment around tech.
"There certainly are some stocks where valuations look somewhat
stretched ... so we're focusing our exposure within the
technology sector on the cheaper end of the market," Mike Bell,
global market strategist at JPMorgan Asset Management, said.
"We're a bit more cautious on the more expensive and some of the
more popular names in the sector," Bell added.
Though tech was a weight, Asian shares recovered to end in
positive territory thanks to a rise in health stocks.
The UK's FTSE 100 <.FTSE> index slightly outperformed the
broader European market, up 0.1 percent, as investors cheered a
transition deal reached between Britain and the European Union
on Monday.
The British pound <GBP=D4> was last at $1.4055.
However, gains were muted as investors braced for new Federal
Reserve Chairman Jerome Powell's first policy meeting starting
later in the day and amid concerns that U.S. President Donald
Trump could impose additional protectionist trade measures.
"Investors lightened their positions ahead of the Fed's policy
meeting. The markets are completely split on whether the Fed
will project three rate hikes this year or four," said Hiroaki
Mino, senior strategist at Mizuho Securities.
In addition, worries about the potential for a trade war cast a
shadow after U.S. President Trump imposed tariffs on steel and
aluminum.
The Trump administration is also expected to unveil up to $60
billion in new tariffs on Chinese imports by Friday, targeting
technology, telecommunications and intellectual property, two
officials briefed on the matter said Monday.
U.S. businesses were alarmed with several large U.S. retail
companies, including Wal-Mart Inc <WMT.N> and Target Corp
<TGT.N>, on Monday urging Trump not to impose massive tariffs on
goods imported from China.
While long-term U.S. bond yields were muted, short-dated yields
rose ahead of an expected rate hike from the U.S. Federal
Reserve after its two-day policy meeting starting on Tuesday.
The yield on 10-year Treasuries was little changed at 2.857
percent <US10YT=RR>, 10 basis points below the four-year high of
2.957 percent touched a month ago.
But the yield on two-year notes <US2YT=RR> hit a 9 1/2-year high
of 2.32 percent on Monday as the Fed appears set to bump up its
policy interest rates <USFFTARGET=> to 1.50-1.75 percent from
the current 1.25-1.50 percent.
Still, with a Fed rate rise already fully priced in, the dollar
barely gained from the prospect of a rate hike.
The euro <EUR=> moderated gains, rising to $1.2341 after
bouncing on Monday following a Reuters report that European
Central Bank officials were shifting their debate from bond
purchases to the expected path of interest rates.
The yen was little changed at 106.37 per dollar <JPY=>, with
traders wary of any new developments in a cronyism scandal that
has eroded support for Japanese Prime Minister Shinzo Abe.
Oil prices edged slightly higher as investors remained wary of
growing crude supply although tensions between Saudi Arabia and
Iran provided some support.
Brent crude futures <LCOc1> traded at $66.47 a barrel. U.S. West
Texas Intermediate (WTI) futures <CLc1> were $62.66 a barrel.
(Reporting by Kit Rees and Hideyuki Sano in Tokyo; Editing by
Matthew Mpoke Bigg)
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