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US futures fall amid tech rout, Microsoft ( MSFT ) down

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Global cyber outage and disruption weighs on mood

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Dollar set for weekly gain

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Graphic: World FX rates http://tmsnrt.rs/2egbfVh

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

(Updates throughout)

By Dhara Ranasinghe and Marc Jones

LONDON, July 19 (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 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.

OUTAGE WOES

A global tech outage disrupted operations in multiple

industries on Friday, with airlines halting flights, some

broadcasters going off the air and everything from banking to

healthcare hit by system problems.

LSEG Group said its Workspace news and data

platform faced an outage that affected user access worldwide. It

later said technical problems on FX spot and forward rates had

been resolved.

Microsoft ( MSFT ), meanwhile, fell 2.7% in premarket

trading after the cloud disruption.

"Investors are already on edge for this tech rotation

and this global outage adds a further dose of uncertainty," said

Ben Laidler, head of equity strategy at Bradesco BBI.

European stocks fell 0.5%, while MSCI's broadest

index of Asia-Pacific shares outside Japan slid

1.7% and was set for its worst week in three months with a

nearly 3% loss. Japan's Nikkei closed just a touch lower.

Technology stocks continued to struggle in Asia, with South

Korea's tech-heavy KOSPI index and Taiwan stocks

both falling 1% and 2.26%, respectively.

In China, investors were left disappointed over the lack of

details provided on the implementation steps for achieving

economic policy goals at the conclusion of its closely watched

plenum on Thursday.

Government bond yields in Europe and the U.S. nudged higher

.

DOLLAR RECOVERS

In currency markets, the dollar clawed back some ground.

The dollar index, which measures the U.S. currency

against six others, was up 0.17% higher at 104.33, up from a

four-month low of 103.64 it touched on Wednesday.

It is set for a 0.2% gain for the week after two weeks of

losses, with the currency undermined by growing conviction that

the Fed could cut interest rates in September.

The euro slipped 0.12% to $1.0883, having dipped

the previous session after the European Central Bank (ECB) kept

rates on hold as expected, but left the door open to a September

cut as it downgraded its view of the euro zone's economic

prospects.

Two ECB policymakers on Friday backed further interest-rate

cuts, expressing greater confidence that inflation was heading

to the ECB's goal next year.

Sterling eased 0.2% to $1.2923 after data showed British

retail sales volume fell by more than expected in June, while

the dollar was broadly steady at around 157.45 yen.

In commodities, Brent crude prices fell by 8 cents,

or 0.1%, to $85.03 a barrel. U.S. West Texas Intermediate crude

futures fell 17 cents, or 0.2%, to $82.65 a barrel.

Gold eased 1%, retreating from a record high of

$2,483.60 per ounce hit earlier this week on the prospect of

lower global interest rates.

(Reporting by Rae Wee in Singapore and Marc Jones, Amanda

Cooper and Dhara Ranasinghe in London; Editing by Andrew

Cawthorne and Arun Koyyur)