ASX futures fell 75 points or 1 per cent at 6903 near 8.00 am AEST, pointing to a softer start to trade.

The major U.S. stock indexes fell sharply on Thursday, led downward by technology and social-media companies, after Facebook’s owner, Meta Platforms, dropped after a disappointing earnings report.

The tech-heavy Nasdaq Composite Index was down 3.7%. The broader S&P 500 ended down 2.4 percent, and the Dow Jones Industrial Average slipped 1.5 percent.

At home, the S&P/ASX 200 finished a rough session down 0.1% at 7078.0 as local tech stocks were hammered. After an early 0.6% tumble, the benchmark fluctuated before cutting losses in the last two hours.

The tech sector slipped 5.9% as Xero, Appen, Altium and WiseTech each lost between 5.0% and 8.0%, relinquishing part or all of their robust gains this week.

The declines came as Meta shares fell more than 20 percent in after-hours trading after a steeper-than-expected drop in profits.

The heavyweight financial sector slipped 0.1%, while iron ore miners Rio Tinto, BHP and Fortescue rose between 2.4% and 3.3%.

It dropped 1.8 percent, its bad patch in more than a month, as the pan-European Stoxx Europe 600 fell overseas, after the European Central Bank indicated a possibility of an interest on rates this year. Across the channel, the Bank of England lifted rates to 0.5%. Japan’s Nikkei 225 slid 1.1% in Asia. Chinese markets were closed for a public holiday.

In commodities, gold futures fell 0.2 per cent at $US1806.00 an ounce; Brent crude gained 1.7% to $US90.99 a barrel; iron ore unavailable due to Lunar New Year holidays.

In bond markets the yield on the Australian 10-year bond dipped to 1.86%, while the benchmark US 10-year Treasury yield firmed to 1.83%. Yields fall when prices rise.

The Australian dollar was fetching 71.28 US cents at 8.00am after crossing at 71.32 previously. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, eased to 89.49.

Asia

Chinese and Hong Kong share markets are closed for the Lunar New Year holidays.

Japan’s Nikkei Stock Average declined 1.1%, ending a four-session winning streak. The index was pulled lower by declines for electronics and transport stocks, a stronger yen and US-Russia tensions over Ukraine. Sony Group fell 6.1% following its 3Q results. Panasonic fell 6.9% after its 3Q net profit fell short of consensus estimates. Kawasaki Kisen Kaisha slumped 14% and Central Japan Railway fell 4.2%.

Europe

European stocks fall after the European Central Bank held interest rates, but kept the door open for an increase later this year, analysts say. Eurozone inflation reached another all-time high on Wednesday, climbing 5.1% in January from a year earlier. The pan-European Stoxx 600 declined 1.8%.

“The ECB is also adapting its stance to the continuing inflation overshoot, albeit more slowly than the US Fed and the Bank of England,” Berenberg economist Holger Schmieding says. “ECB President Christine Lagarde, at today’s press conference, no longer ruled out a rate hike in 2022.”

In London, the FTSE 100 fell 0.7%, with a hawkish turn from the Bank of England and the European Central Bank catching investors on the hop. The Bank of England boosted interest rates by a quarter point to 0.5%.

“Some policymakers are clearly now very concerned about the rising risk of inflation spiraling out of control, but while the bank is only expected to care about inflation and not the effect of rate hikes on the consumer, it needs to weigh the risks of stamping out economic growth with its tighter monetary policy,” says Chris Beauchamp, chief market analyst at IG Group. That nervousness has been visible across the broader market, with stocks moving lower in the aftermath of the news, Mr. Beauchamp says.

North America

Big US stock indexes sank on Thursday, led by losses in technology and social-media businesses, as the Facebook owner Meta Platforms plummeted after a disappointing earnings report.

The tech-heavy Nasdaq Composite Index was down 3.7%. The wider S&P 500 dropped 2.4 percent, and the Dow Jones Industrial Average lost 1.5 percent.

Meta’s stock fell 26% after the social-media company alarmed investors by posting a sharp drop in profit and a grim outlook. Other social-media companies dropped in its aftermath. Snap, which is set to report earnings Thursday, fell 24%, while Pinterest dropped 10%. Twitter fell 5.6%.

Other tech stocks fell, too. Spotify Technology dropped 17% after the company came close to giving annual guidance but decided not to, spooking investors. Amazon.com which will also report earnings Thursday fell 7.8%. Chip maker Nvidia fell 5.1%.

The drop on Thursday wiped away recent gains in the Nasdaq and threatened to restoke a selloff that pummeled US stocks in the year’s opening weeks. As the Federal Reserve has shifted toward interest-rate increases to keep inflation in check, investors have scurried away from riskier assets like tech stocks that had thrived in the low-rates world. The Nasdaq has dropped more than 11% so far this year, and the S&P 500 is off more than 6%.

Money managers are rotating into sectors such as energy and banking that they believe will benefit from the economic recovery and higher borrowing costs.

“Investors are moving in a short space of time from an almost perfect environment for risk assets to a more normal environment,” said Nicholas Brooks, head of economic and investment research at Intermediate Capital Group. “Those companies that benefited the most from that dramatic easing in monetary policy, they’re going to be more susceptible to big drops if there’s any disappointments in their earnings.”

An increasingly hawkish tone from global central banks also rattled the markets. The Bank of England moved forward with raising borrowing costs on Thursday, increasing its policy rate to 0.5 percent from 0.25 percent. In Frankfurt, the European Central Bank held its key interest rates steady but ECB President Christine Lagarde expressed concern about inflation and left the possibility of a rate increase later this year on the table.

The euro soared on her comments, rising 1.2% to $1.1445, and European government bond yields surged. The broad Stoxx Europe 600 index fell 1.8 percent, its biggest drop in more than a month.

Japan’s Nikkei 225 fell 1.1% in Asia. Chinese markets were shuttered for a public holiday.

News from overseas helped fuel Thursday’s swoon in US stocks, according to Chris Senyek, chief investment strategist at Wolfe Research. “Global yields are moving higher and that’s putting pressure on valuations throughout the market,” he said.

Higher interest rates weigh on the share prices of fast-growing tech companies because they lower the value that investors attach to their future earnings. In recent weeks, markets have bounced around as expectations mounted that the Fed would act aggressively to raise rates while Big Tech’s corporate earnings report have been variable.

Apple and Microsoft both reported robust quarterly results last week, lifting investor sentiment. But Meta, the company formerly known as Facebook, plunged after delivering the first earnings report since Chief Executive Mark Zuckerberg unveiled a refocus on the metaverse. The company said it did expect its rate of revenue growth to slow because users were spending less time on its more lucrative services.

PayPal shares fell 25% Wednesday after the payments processor cut its profit forecast. Shares of the company fell further on Thursday, dropping 6.2 percent.

“I think it was more of a reminder to the market that some of these stocks are not going to be able to maintain on this trajectory,” said Altaf Kassam, head of investment strategy and research for Europe, the Middle East and Africa at State Street Global Advisors.

One bright spot on Thursday was T-Mobile US, whose stock surged more than 10% after the telecommunications firm miles passed analysts’ forecasts for profits. Still, the S&P 500’s communications-services sector fell 6.3%, the worst-performing sector of the index as Meta and Twitter weighed on it.

In commodities, front-month US oil futures were up 2.3% to settle at $90.27 a barrel, the first time the benchmark has closed above $90 since October 2014. This week, crude prices have risen as US crude inventories have decreased, a sign of tighter supplies, while Russia’s threat of conflict with Ukraine has caused turbulence in global energy markets.

On the economic side, first-time claims for jobless benefits fell to 238,000 in the week ended 29 Jan. Claims hit a record low in early December as companies held on to more workers due to a persistent labour shortage.

In the bond market, the yield on 10-year Treasury notes rose to 1.834% from 1.765% on Wednesday. Bond yields rise and fall inversely to prices.