European stocks dropped Monday, fronted by losses in technology shares, while investors held back from buying U.K. stocks while the British government tried to sort out how it will move forward with a hung parliament.
The Stoxx Europe 600 SXXP, -0.92% fell 1% to 386.44, with only the oil and gas sector showing a gain. Tech, consumer goods and industrial shares were losing the most.
The Stoxx 600 Technology Index FX8, +0.25% slid 3% after a selloff in the tech sector abruptly kicked off Friday on Wall Street and spilled over Monday into the Asian and European trading sessions. The technology bellwether Nasdaq Composite Index COMP, -1.80% tanked 1.8% on Friday, and the S&P 500 technology index plunged 2.7%.
“Much of the U.S. stock market rally in 2017 has been based on the success and appetite investors have had for Facebook, Alphabet, Amazon, Netflix and Apple — all of which have risen by between 27% and 34% this year. How long this can be sustained remains to be seen,” said David Buik, market commentator at Panmure Gordon & Co. in a Sunday note.
Apple shares AAPL, -3.88% fell 2% in U.S. premarket trade Monday after the tech heavyweight was downgraded for a second time in a week, with Mizuho Securities cutting its rating to buy from neutral.
In Frankfurt, Apple’s stock APC, -2.77% slumped 5.5%.
In London on the benchmark FTSE 100, shares of Micro Focus International PLC MCRO, -2.76% fell 2.7% and Sage Group PLC SGE, -1.86% was off 2.2%. Those moves helped pushed the FTSE 100 UKX, -0.24% down 0.4% to 7,498.72.
The U.K.’s more domestically focused FTSE 250 MCX, -0.40% also fell, losing 0.6%.
London-listed stocks struggled as investors watched developments in the British government after Thursday’s general election resulted in a hung parliament.
U.K. Prime Minister Theresa May was scheduled Monday to meet with rank-and-file lawmakers as she faces criticism for her decision to hold a general election that resulted her Conservative Party losing hold of the House of Commons. The snap election took place before the slated June 19 start of negotiations over Britain’s exit from the European Union, or Brexit.
May has been working on forming a new government with support from Northern Ireland’s Democratic Unionist Party, which holds 10 seats, but no agreement has been struck yet, according to reports Monday.
May and French President Emmanuel Macron were scheduled to meet in France on Tuesday. Macron’s upstart party on Sunday won the first round of France’s parliamentary elections.