Tech sell-off, cyber outages cap a choppy week for world markets

LONDON (Reuters) -World stocks pulled back from record highs on Friday as investors continued to rotate away from megacap growth stocks, while a global cyber outage hit services from airlines to banks and financial services and capped a turbulent week for markets.

A tech sell-off sparked by Sino-U.S. trade tensions, doubts over U.S. President Joe Biden's fate in the presidential race and growing chances of a win for rival Donald TrumpDonald Trump, weak Chinese economic data and a lacklustre third plenum outcome have cast a shadow over the global mood.

U.S. stock index futures fell, indicating more pain on Wall Street after all three major stock indices suffered losses on Thursday. European stocks were broadly lower, while in Asia tech stocks continued to struggle.

MSCI's world stock index fell to a two-week low, retreating further from a record high hit earlier this month.

"The changing probability of a potential Trump presidency and what that might mean for different markets, whether it be his view of the dollar or tech regulation, has clearly created some market rotations this week," said Michael Metcalfe, head of global macro strategy at State Street Global Markets.

On top of that investors are looking closely at the Federal Reserve's response to improving inflation data and the U.S. earnings season, which is now in full swing.

"Tech has been where all the earnings growth has been (in recent years) so those will be the crucial thing for risk sentiment overall," said Metcalfe.