World stock markets tanked Wednesday, as hopes faded that a Brexit deal would be wrapped by next week and a revenue warning from Texas Instruments pulled down tech stocks.
It was hard to select which was weighing on sentiment more in early European trading. The pound was pulled down to $1.2850 from $1.30 after UK legislators put the brakes on the government’s Brexit plans again on Tuesday.
In the meantime, Europe’s tech industry dropped by 1.4%. STMicroelectronics, Dialog Semiconductor, and Infineon all dropped after Texas Instruments plunged 10% in after-hours Wall Street trading.
Leading Asian chipmakers, including Taiwan’s TSMC and South Korea’s SK Hynix, had dropped on worries the industry was being squeezed both by a downturn in global demand and by the U.S.-China trade battle.
With buyers seeking out safer belongings again, the Japanese yen rose to a one-week high of 108.25 per greenback, and the Swiss franc gained early in Europe.
Adam Cole, a tactician at RBC Capital Markets, said Brexit was driving a “general risk-off tone”. Others pointed to the rising probability UK Prime Minister Boris Johnson would now lead for a snap election.
The U.K. Sterling has surged 4.5% this month, which, if it holds the gains, might be its best month since January 2018.
Receding worries about a no-deal Brexit also underpinned the euro at $1.1122, just below a two-month high of $1.1180.
The greenback was subdued before a Federal Reserve policy meeting next week, where policymakers are anticipated to pare rates of interest by 0.25% point.