European stocks sink on 'overvalued' tech sector

European stock markets slid on Friday, joining a fierce global sell-off as investors took flight on resurgent fears about the 'overvalued' technology sector, dealers said. In late morning deals, London's benchmark FTSE 100 index fell 1.53 percent to 6,540.57 points, Frankfurt's DAX 30 retreated 1.92 percent to 9,273.06 points and in Paris the CAC 40 index lost 1.64 percent to 4,341.07. European tech stocks wereespecially badly hit, with shares in German semiconductor giant Infineon diving 2.14 percent to 8.09 euros in Frankfurt. British chipmaker ARM Holdings plunged 5.03 percent to 954 pence in London. And Alcatel-Lucent, a leading global supplier of telecom equipment for the Internet, saw its stock slide 3.73 percent to 2.71 euros in Paris. US stocks followed Europe lower, opening sharply in the red on disappointing earnings from Wall Street banking giant JPMorgan Chase. Five minutes into trade, the Dow Jones Industrial Average fell 112.39 points (0.70 percent) to 16,057.83. The broad-based S&P 500 tumbled 12.88 (0.70 percent) to 1,820.20, while the tech-rich Nasdaq Composite Index sank 43.71 (1.08 percent) to 4,010.39. Dow member JPMorgan slumped 4.7 percent after first-quarter earnings of $5.3 billion fell 19 percent from a year ago and missed expectations due to weak trading and mortgage results. The bank is often considered a bellwether for the sector, and most of the big banks report results next week. - Europe plays catch-up - "Europe's sell-off is playing catch-up to events in the US," said analyst Will Hedden at trading firm IG. New York stocks had plunged Thursday on lingering fears that high-flying technology stocks like Facebook and Netflix may be overvalued. "With technology valuations double that of other shares, questions are increasingly being asked about whether current earnings justify" the present levels of tech stocks, added Rebecca O'Keeffe, head of investment at stockbroker Interactive Investor. "Whilst these valuation levels are not even close to those seen in previous technology bubbles, investor sentiment appears to have turned for the worse. "The knock-on impact of the sell-off has seen markets fall aggressively and anxious investors are running for cover." Wall Street's tech-rich Nasdaq Composite slumped 3.10 percent -- the biggest single-day percentage point drop since November 2011 -- and the Dow Jones Industrial Average shed 1.62 percent. The US losses wiped out a two-day rally that picked up on Wednesday when the minutes of the latest Federal Reserve policy meeting suggested no support for an early rise in interest rates. - Asia slides into red - The worries spread to Asia on Friday, sending Japan's Nikkei-225 index down 2.38 percent to 13,960.05 points -- its lowest close in six months. Tokyo sentiment was also hit by the Bank of Japan's hawkish view on additional easy money. Shanghai stocks slid 0.18 percent and Hong Kong fell 0.79 percent, dragged down by data showing that Chinese inflation picked up in March but still below forecasts Elsewhere, Seoul shed 0.56 percent and Sydney dropped 0.95 percent in value. "Asian markets ended in the red on Friday, spooked by the huge sell-off on Wall Street," said analyst Joao Monteiro at trading firm Valutrades. He added: "Shanghai's Composite Index fell too as investors' focus returned to potentially bloated valuations, particularly among so-called 'fast retail', or internet-related companies, and tech stocks." In foreign exchange deals on Friday, the euro rose to 82.90 British pence from 82.75 pence on Thursday, while the pound dipped to $1.6732 from $1.6781. The European single currency slipped to $1.3872 from $1.3888 late on Thursday in New York. The dollar was stable against the yen at 101.55. On the London Bullion Market, the price of gold decreased to $1,318.29 an ounce from $1,320.50 on Thursday