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Tech Sector Under Pressure in Europe, Asia12-27-17 7:40 AM EST
By Kenan Machado and Riva Gold 
   -- Oil retreats from 2 1/2 -year high 
 
   -- Tech stocks lag in Europe and Asia 
 
   -- World's biggest shipbuilder has worst day on record 

The technology sector remained under pressure in Europe and Asia Wednesday while a recent rally in oil and copper prices drove gains in shares of global energy and mining companies.

Wider market moves and volumes were muted in the quiet period between Christmas and New Year's Day. Futures pointed to a 0.1% opening advance for the S&P 500 and the Stoxx Europe 600 edged down 0.2% midday as regional markets reopened from a holiday.

Shares of technology companies fell in Europe and Asia Wednesday, leading declines there, after a drop in their U.S. counterparts on Tuesday. Shares of Apple and some of its suppliers dragged down major U.S. indexes in a fall analysts attributed to reports that the company is considering cutting its first-quarter sales forecast for its iPhone X.

In China, smartphone-related companies fell to begin the week, while the sector also led declines in Hong Kong and Australia. While the smartphone supply chain will be under pressure in the seasonally weak first quarter, President Securities said it doesn't see fundamentals deteriorating.

Tech has been the world's best-performing sector this year, so it isn't surprising there has been a year-end pullback, said Felix Lam, a portfolio manager at BNP Paribas Asset Management.

Among gainers, Europe's oil-and-gas and basic resources sectors were up 0.5% and 1% respectively after a holiday, catching up with Tuesday's rally in oil and copper prices.

U.S. crude futures briefly popped above $60 a barrel Tuesday after a pipeline explosion in Libya--ending the day up 2.6% at the highest settlement since June 2015--before edging down 0.8% to $59.48 a barrel on Wednesday. The incident is expected to reduce oil production there by up to 100,000 barrels a day, the country's National Oil Co. said on its website.

In Europe, shares of Tullow Oil were up 2.7% Wednesday and Italian oil-and-gas contractor Saipem was up 3.5% after it said late Friday it had signed several contracts for onshore and offshore projects.

Shares of global mining giants also drew support from a climb in copper prices. London-listed copper futures were last up 0.6% at $7,182 a ton, around their highest in nearly four years. The metal, which is heavily used in construction and manufacturing, has benefited from improving economic growth in the U.S. and indications of stronger demand from China.

In Asian trading, Chinese stocks sold off in the afternoon amid broad declines in many of the blue-chip companies that have done well this year. The Shanghai Composite was down 0.9% with insurers faring worst, and the CSI 300--made up of the biggest stocks in both Shanghai and Shenzhen--slid 1.5%. Data showed China's industrial-profit growth slowed sharply in November, due to slower growth in prices for industrial goods and higher production costs.

Declines for some tech firms helped offset a rebound in Chinese property developers in Hong Kong, which left the benchmark Hang Seng Index up 0.1%.

South Korea's Kospi edged up 0.4% as some major tech stocks including Samsung Electronics rebounded and shares of pharmaceutical companies rose. That helped offset a 28% drop for Hyundai Heavy Industries.

Hyundai Heavy, the world's biggest shipbuilder, had its worst day ever after releasing guidance through 2018, announcing a 1.3 trillion won ($1.2 billion) stock-sale plan and saying it would sell part of its refining operation.

In currencies, the euro was last up 0.3% at $1.1892, having fully recovered after a sudden drop on Christmas day briefly sent it down around 3%. Analysts attributed the move to stressed dollar liquidity amid light holiday volumes.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 others, was down 0.2%.

Yifan Xie

and

Marc Navarro Gonzalez

contributed to this article.

Write to Kenan Machado at kenan.machado@wsj.com and Riva Gold at riva.gold@wsj.com

 

(END) Dow Jones Newswires

December 27, 2017 07:40 ET (12:40 GMT)

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