A three-week rout in technology stocks is fuelling fears of a broader sell-off in equities as investors re-evaluate the risks they are prepared to take now that the era of ultra-loose monetary policy is drawing to a close.

The tech-heavy Nasdaq Composite index was on course for its third consecutive weekly decline, its worse losing streak since November 2012, as investors fretted that certain parts of the market are overheating and heading for a tumble.

Tech shares in Asia and Europe shared in the pain yesterday following the largest one-day sell-off in 30 months for US biotech stocks on Thursday. Asian internet stocks have experienced an average fall of 20 per cent in the past month. "When momentum turns, it turns hard, and it's unclear when people will step in and support them," said George Pearkes of Bespoke Investment.

The stock-market volatility comes as the US Federal Reserve continues to wind down its monthly purchases of bonds, a policy that has supplied easy money to financial markets.

The S&P 500 entered negative territory for the year to date this week, and remained under pressure yesterday. – (Copyright The Financial Times Limited 2014)