European shares, dollar weak ahead of Yellen testimony

Wed May 7, 2014 7:49am EDT
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By Carolyn Cohn

LONDON (Reuters) - European shares fell and the dollar hovered above six-month lows against a basket of currencies on Wednesday on an overnight drop in U.S. tech stocks and on concerns over the deepening crisis in Ukraine.

Investors were also awaiting congressional testimony from U.S. Federal Reserve Chair Janet Yellen later in the day.

U.S. stock futures were pointing to a lower start on Wall Street, after the tech-heavy Nasdaq index .IXIC fell 1.4 percent in the previous session.

Twitter shares (TWTR.N: Quote) sank 18 percent to a new low on Tuesday, wiping out more than $4 billion of its market value, as early investors sold stock in the messaging service after a six-month "lock-up" expired.

Easy monetary policy in the developed world is causing market imbalances, analysts said.

"It looks like we're mirroring the past cycles - addressing over-indebtedness problems with more debt, printing money and pushing up asset prices," said Iain Stewart, investment manager at Newton Investment Management.

"Almost certainty we will see bubbles."

Ukraine, which appears to sliding towards war after its deadliest week since a separatist uprising began in its mainly Russian-speaking east, also remains a concern for the markets.   Continued...

A man looks at an electronic board displaying Japan's Nikkei average (top C) and various countries' stock indices, as passers-by walk past outside a brokerage in Tokyo April 16, 2014. REUTERS/Toru Hanai