By Julien Ponthus

(Reuters) – Tech stocks staged a tentative rebound across financial markets on Friday as stellar results from Amazon convinced traders not to give up on a sector weakened by a global monetary tightening cycle and the historic crash of Facebook owner Meta.

The company led by chief executive Mark Zuckerberg saw over $200 billion of its market value wiped out after it issued a dismal forecast, representing the biggest single-day slide for a U.S. company.

Meta’s selloff spilled over to other listed tech companies dragging Wall Street deep into the red before Amazon’s convincing earnings beat reported after market close on Thursday changed the mood.

Inspired by the upbeat set of results for the tech giant, Asian equities rose about 1% and Amazon’s shares listed in Frankfurt were up 12%.

Shares of social media platform SNAP were up more than 50% in pre-market trading after they tumbled by a quarter in the previous session in another sign that sentiment towards the sector was steadying.

At 1108 GMT, the European tech index was down a modest 0.7% in contrast to the Nasdaq’s 3.7% fall on Thursday and was outperforming the rest of pan-European STOXX 600 index. Nasdaq was set to open higher with futures up 0.7%.

MIXED BAG

The fourth-quarter earnings season has been mixed for tech companies with bitter disappointments from such players as streaming giant Netflix and fintech PayPal partially offset by uplifting results from Apple and Microsoft.

Mark Haefele, chief investment officer at UBS Global Wealth Management said the big picture for the sector was far from being bleak.

“Overall, the earnings outlook is still solid, with the global tech sector on track for earnings growth of around 15%,” he wrote in a daily morning note to clients.

“In our base case, we expect valuations to stabilize and for strong mid-teens earnings growth to be reflected in share prices over the next 12 months”.

Many investors started trimming their holdings of tech stocks even before the earnings season kicked off as future earnings growth promised by the sector loses its appeal when central banks raise rates, increasing the immediate financial rewards of holding risk-free government bonds.

Top investment banks have been recommending rotating portfolios towards stocks that do well when inflation and bond yields rise, such as banks, insurers, miners and oil companies, ever since the U.S. Federal Reserve flagged it would start raising rates from next month.

(Reporting by Julien Ponthus; Editing by Saikat Chatterjee and Tomasz Janowski)