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GLOBAL MARKETS-Stocks slide on tech sell-off, bond yields steady

Herbert Lash and Danilo Masoni
·3-min read

(Adds byline, dateline, Powell remarks, fresh prices)

* Powell comments ease bond-yield angst

* Crude oil, metal prices rise on growth outlook

* Expectations of faster growth spur inflation fears

* Global asset performance:http://tmsnrt.rs/2yaDPgn

By Herbert Lash and Danilo Masoni

NEW YORK/MILAN, Feb 23 (Reuters) - Global equity marketsslid on Tuesday as a rally in commodity-related assets gave into pressure from fears of an over-bought market as investorsdumped tech stocks, though remarks by Federal Reserve ChairJerome Powell helped calm sentiment.

Copper, a leading indicator of the economic cycle, touched afresh 9-1/2 year high before paring gains as equities marketsfell, while oil traded close to more than one-year highs as theeasing of coronavirus lockdowns was expected to boost demand.

Gold slid as the dollar rebounded from six-week lows, withother precious metals joining the slide. But a degree of angstwas reflected in Cboe's market volatility index, up 6.9%and touching multi-week highs.

Powell said in prepared remarks for a U.S. Senate BankingCommittee hearing that the recovery remains "uneven and far fromcomplete", and that it will be "some time" before the Fedconsiders changing policies aimed at helping regain fullemployment.

Powell believes monetary policy needs to be supportive andthat there is a long way to go to repair the jobs market andbefore inflation becomes a concern, said Michael Arone, chiefinvestment strategist at State Street Global Advisors in Boston.

"I'm not anticipating any changes to monetary policy anytime soon," Arone said, a view that should ease market concernsthat the Fed could boost interest rates to tap down inflation.

"U.S. 10-year Treasury rates have climbed very quickly in ashort amount of time. And that has spooked investors."

MSCI's benchmark for global equity marketsfell 0.68% to 669.22 while the slide on Wall Street was subduedoutside of the tech-heavy Nasdaq, which dropped 2.13%.

The Dow Jones Industrial Average fell 0.51% and theS&P 500 lost 0.86%.

In Europe, tech stocks posted their worst day in dayfour months, falling 3.8%, while the broad FTSEurofirst 300index closed down 0.46% to 1,583.81.

The decline in tech stocks and rise in value stocks, alongwith copper and crude oil, show investors are rotating intoassets that are expected to do well in an improving economy,said Fawad Razaqzada, market analyst at ThinkMarkets in London.

But the equity decline is a warning sign that risks must beheeded and that investors should not be so reckless or deceivedby markets at extremely high levels, he said.

"It's more of a rotation story than of stocks topping out.So the dips will be bought," Razaqzada said. "The market is upalmost in a straight line. You've got to have the marketcorrect."

Tesla shares fell into the red for the year, hit bya 12.1% plunge in bitcoin. The electric carmakerrecently invested $1.5 billion in the crypto currency, whichfell as investors grew nervous of its sky-high valuations.

After being knocked off an eight-month high by EuropeanCentral Bank chief Christine Lagarde signaling discomfort withthe recent surge in yields, the 10-year Bund yieldresumed a recent upward trajectory and was last at -0.317%.

The 10-year U.S. Treasury note fell 1 basispoints to 1.3534%.

Commodity prices strengthened again.

Oil prices jumped by more than $1 at one point, underpinnedby optimism over COVID-19 vaccine rollouts and lower output asU.S. supplies were slow to return after a deep freeze in Texasshut in crude production last week.

Brent crude futures rose $0.03 to $65.27 a barrel.U.S. crude futures slid $0.16 to $61.54 a barrel.

In currency markets, the dollar in early trade brieflydropped to its lowest since Jan. 13, while commodity-linkedcurrencies hovered near multi-year highs.

The dollar index rose 0.151%, with the eurodown 0.11% to $1.2141. The Japanese yen weakened 0.13%versus the greenback at 105.19 per dollar.

Spot gold prices fell -0.09% to $1,807.01 an ounce.

(Reporting by Herbert Lash, additional reporting by DaniloMasoni in Milan and Anshuman Daga in Singapore; Editing by AnaNicolaci da Costa and Jan Harvey)