The reversal of risk that hit markets at the end of last week, continued into Monday, hinting at a return of volatility that would make for uncomfortable trading conditions as volumes begin to drop for the summer.
Friday's tech sell-off on Wall Street – resulting in losses of more than 3% for Apple, Alphabet and Facebook – spread to Asia and Europe on Monday, and Nasdaq futures were already indicating further US tech losses.
Nervous uncertainty punctuated trade in Europe following last week's UK general election that resulted in a weak-looking coalition between the Conservative Party and Northern Ireland's Democratic Unionist Party.
But it was the technology sectors in focus after Friday's US sell-off.
On Sunday, Mizuho Securities downgraded Apple to neutral from buy, citing lofty valuations after a long run higher.
"The stock has meaningfully outperformed on a YTD basis [up 22%] and enthusiasm around the upcoming product cycle is fully captured at current levels, with limited upside to estimates from here," said Mizuho analyst Abhey Lamba.
Despite several large drops, Apple's shares remain 41% higher over a five-year period.
Whispers of bubbles
Nevertheless, after a long period of persistent gains for the technology sectors, the suggestion of bubbles and corrections has been whispered across trading floors for several weeks.
So far this year, the S&P 500 technology sector is up 16% – the biggest gain of all 10 industry sectors on the benchmark US index.
Morgan Stanley Capital International (MSCI) index rankings this month show that the information technology sector is the best performing year to date, with a near 22% rise.
Fergus Shaw, partner at Cerno Capital, said on Monday: "Overvaluations of technology companies today resemble previous investment manias."
He added: "The dotcom bubble teaches us that the industry is rarely aware of the extent of mania until it is too late, so investors must remain cautious of this trend.”
Asian and European stocks fall
In Hong Kong, AAC Technologies, an Apple supplier, fell 3.8% while Tencent Group lost 2.5%.
In Europe, Atos, the French IT company, lost 3.3%, while UK-based Sage Group and Micro Focus were both down more than 2% and internet investment group Polar Capital Technology Trust fell 3.9%.
US-listed exchange traded funds focused on internet and technology investment also fell heavily. First Trust Dow Jones Internet Index Fund, the largest internet ETF by assets under management, fell 3% in early trade on Monday.
Is a correction overdue?
Talk of a market correction has been rife in recent weeks. A correction is a fall of more than 10% – but less than 20% – from an index's most recent peak.
While bear markets – falls of more than 20% – are relatively rare, corrections are a frequent occurrence.
David Jane, fund manager at Miton, said in an investment note earlier this month: "Clearly, equity valuations are high, and in certain areas, extremely high, particularly for internet companies."
Targeted losses such as those seen on Friday and Monday in the tech sectors are not unusual either. Profit taking is regular feature of markets when particular stocks have enjoyed a strong run.
A clearer sign of market correction and heightened risk aversion is when equity market sell offs combine with investment growth in haven assets like government bonds, dollar assets and gold.
In the UK, the 10-year Gilt yield fell to just 1% as investors bought into UK bond markets - however, much of this was likely to be due to cautious behaviour in the wake of the election result.
Gold, in fact, has retreated in the last few days and the dollar has been largely weaker also.