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GLOBAL MARKETS-Amazon wobble ripples across world stock markets

Published 28/07/2017, 09:10 pm
© Reuters.  GLOBAL MARKETS-Amazon wobble ripples across world stock markets
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* Amazon's earnings miss pulls global stocks away from highs

* U.S. GDP data due out amid political turmoil over Obamacare

* Swiss franc drops as SNB bucks the trend and stays easy

* Graphic: World FX rates in 2017 http://tmsnrt.rs/2egbfVh (Adds quote, updates prices)

By Abhinav Ramnarayan

LONDON, July 28 (Reuters) - An earnings miss by Amazon AMZN.O that hit U.S. technology stocks overnight rippled through other markets on Friday, with Asian stocks retreating from recent highs and European tech shares opening sharply lower.

Amazon's stock tumbled over 2 percent 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. 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.

Amazon has been one of the companies powering the sector this year, with a 40 percent rise up until Thursday.

Though other U.S. sectors were resilient, Wall Street's "fear index", the VIX, rose sharply on Thursday from a record low of 8.84 percent to an intra-day high of 11.5 percent.

Amazon is one of the so-called "FANG" group of the most influential tech stocks -- the A between Facebook (NASDAQ:FB) and Netflix (NASDAQ:NFLX) with Google (NASDAQ:GOOGL) at the end -- hence the broad impact of its setback, which hit Asian shares as well knocking the U.S. tech sector off recent highs.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.8 percent, with Samsung Electronics 005930.KS , Asia's largest company by market capitalisation, dropping 3.5 percent.

Europe's tech index .SX8P fell 1.6 percent on Friday and was among the region's worst-performing sectors.

"While Amazon's results may only be responsible for some short term negativity, with the tech sector as a whole still enjoying a remarkable year, the failure in the Senate could pose further problems," said OANDA analyst Craig Erlam.

U.S. 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. dollar dipped against its major peers on Friday .DXY , though second quarter U.S. 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 percent in the second quarter, from 1.4 percent in the first quarter.

SWISS FALL

The Swiss franc was one of the biggest movers in the currency market and is on track to post its biggest monthly fall against the euro for six years. 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 hit a two-month high on Friday after key OPEC members pledged to reduce exports and the U.S. government reported a sharp decline in crude inventories.

Brent crude futures LCOc1 was at $51.73 per barrel after pushing higher on Friday in European trading.

For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

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