An earnings miss by Amazon
that hit US
overnight rippled through into other markets on Friday, with Asian stocks
retreating from recent highs and European tech shares opening sharply lower.
Amazon's stock tumbled over 2 per cent on Thursday after it reported a slump in profits, as its rapid and costly expansion into new shopping categories and countries showed no sign of slowing.
"It has been a pretty good season for earnings and this is the first big company that has sown a few doubts on that, and it also raises question on where the broader tech sector is headed from here," said Investec economist Victoria Clarke.
has been one of the companies powering the sector this year, with a 40 per cent rise up until Thursday.
Though the other US sectors were resilient, Wall Street's "fear index", the VIX, rose sharply on Thursday from a record low of 8.84 per cent to an intra-day high of 11.5 per cent.
is one of the so-called "FANG" group of the most influential tech stocks, along with Facebook, Netflix and Google, hence the broad impact of its setback, which hit Asian shares as well knocking the US
tech sector off recent highs.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 per cent, with Samsung
Electronics, Asia's largest company by market
capitalisation, dropping 3.5 per cent.
Europe's tech index fell 1.4 per cent in early trading
on Friday, the region's worst-performing sector.
"In terms of one story shaping sentiment it is quite remarkable, but markets are also a bit nervous ahead of US
GDP numbers due out today," said Investec's Clarke.
"The trigger was Amazon
but developments overnight on US healthcare has not helped sentiment."
Senate Republicans failed early on Friday to overturn the healthcare law known as Obamacare, in a stinging blow to President Donald Trump that may end the Republican Party's seven-year quest to repeal the Affordable Care Act.
The dollar dipped against its major peers on Friday, though second quarter US
economic growth data due later could potentially give it some respite from the recent sell-off.
Economists expect the world's largest economy
to have grown about 2.6 per cent in the second quarter, from 1.4 per cent in the first quarter.
The Swiss franc was one of the biggest movers in the currency market
and is on track to post its biggest weekly drop against the dollar for more than 22 months.
The franc has been falling as investors bet the Swiss National Bank will keep monetary policy loose as other central banks move towards tightening.
Oil prices held near eight-week highs hit on Thursday after key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories.
Brent crude futures were at $51.52 per barrel, up slightly in European trading
and close to highs of $51.64 hit on Thursday.