Clampdown on tech giants keeps world stock markets at bay

London — Stock markets remained under pressure on Tuesday as worries about a clampdown on the world’s internet and social media giants compounded mounting global trade and recession jitters.

Those nerves have pushed investors into top-rated government bonds and other safety plays in recent weeks, and there was little sign of a significant reverse as Europe opened.

Benchmark 10-year US treasury yields steadied just above 2% on bets the US Federal Reserve would raise US interest rates and many as three times this year. German bund yields stuck near record lows, and the yen reached a five-month high against the dollar.

Europe’s Stoxx 600 index recovered from a weak start, but tech stocks remained more than 1% lower after reports the US government is gearing up to investigate whether Amazon, Apple, Facebook and Google misused their market power.

A combined $85bn was wiped off Facebook and Google parent Alphabet’s values. New York’s tech-heavy Nasdaq dropped into correction territory, having lost 10% over the past month.

“The [US investigation] is currently weighing on stocks, but, more importantly, the market is increasingly pricing in the risk of recession,” said Rabobank senior macro-strategist Teeuwe Mevissen. “Sentiment is significantly suppressed.”

Global monetary policy is in focus this week as the hostile trade rhetoric between the US and China continues. Fed rate setter James Bullard said on Monday that lowering US rates “may be warranted soon”.

Australia’s central bank cut rates to a record low and on Thursday the European Central Bank(ECB) is set to detail a fresh dump of cheap money. India is expected to lower its rates too.

MSCI’s broadest index of Asia-Pacific shares outside Japan had ended down 0.3%. China’s blue-chip CSI300 dropped 0.9% and the Hang Seng lost 0.66% in Hong Kong. Japan’s Nikkei ended flat after a rocky session. Wall Street futures gained.

Scramble to safety

US treasury yields also rose but remained near recent lows. US 10-year notes yielded 2.09% after touching 2.06 — the lowest since September 2017.