World shares rebound, try to shake off US tech rout scare

US stock futures and Asian shares regained some footing on Tuesday following a small bounce in European shares as investors looked to whether high-flying US tech shares could recover from their recent rout.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2% while Japan's Nikkei gained 0.4%. US financial markets were shut on Monday for a public holiday while Europe's STOXX 600 index was 1.7% higher.

Globally traded US S&P500 futures EScv1 erased their Monday losses to trade 0.6% higher. Tech shares remained more fragile, however, with Nasdaq futures NQcv1 standing flat after having lost more than 6% late last week.

While many market players say they cannot pinpoint a single trigger for the Nasdaq's sudden plunge, valuations have been stretched after its gain of 75% from a bottom hit in March.

Tesla, the poster child of the euphoria in US big technology stocks with a year-to-date gain of a whopping 400%, looks set to fall after it was excluded from a group of companies that were being added to the S&P 500.

It lost 6.5% in after-hours trade on Friday and fell 2.7% in Frankfurt on Monday.

"Those tech shares were becoming expensive so I would see their latest fall as a healthy correction," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

Risk assets also face headwind from creeping doubts that US policymakers may not be willing to compile massive stimulus as some traders had hoped for.

"The headline figures from Friday's US jobs data were pretty good, so that could lead to speculation policymakers may no longer be eager to dole out trillions of dollars to support the economy," said Masahiko Loo, portfolio manager at AllianceBernstein.

"Markets may have gone too far in expecting the Federal Reserve to announce more easing steps this month," he said, adding receding expectations is one reason behind a rise in US bond yields last week.

The 10-year US Treasuries yield stood at 0.716% US10YT=RR, off a five-month low of 0.504% touched in August.

In currencies, sterling dropped after the European Union told Britain on Monday that there would be no trade deal if it tried to tinker with the Brexit divorce treaty.

The warning came after British Prime Minister Boris Johnson's government was reported to be planning new legislation to override parts of the Brexit Withdrawal Agreement it signed in January.

The pound lost 0.80% on Monday to $1.3167 GBP=D4, near its lowest levels in two weeks.

Other currencies barely moved with rises in US yields helping to stem the dollar's recent weakness.

The euro eased slightly overnight to $1.1818 EUR= while the dollar was little moved at 106.31 yen JPY=. Gold was little changed at $1,930.9 per ounce XAU=.

Oil prices dropped to five-week lows after Saudi Arabia made its deepest monthly price cuts to supply for Asia in five months and as uncertainty over Chinese demand clouds the market's recovery.

US WTI futures CLc1 fell 1.4% to $39.23 per barrel.