* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Europe’s tech stocks drop 3 pct in worst day since Oct
* French and southern euro zone bonds rally
By Marc Jones
LONDON, June 12 (Reuters) - Technology stocks fell heavily across Europe and Asia on Monday and were set to fall again on Wall Street after the worst day for Apple shares in more than a year, while easing political tensions lifted the euro and European bonds.
The tech-heavy Nasdaq was seen opening down 0.8 percent after an almost 2 percent drop on Friday, its third biggest one-day loss of the year.
“This is the nature of the tech sector. Valuations do from time to time become very stretched and they come back and anyone who has paid a very high valuation might experience some short-term pain,” said Fergus Shaw, fund manager at Cerno Capital.
A near 4 percent slump in Apple on Friday, along with falls in Alphabet, Facebook and others took a heavy toll on rivals including Samsung and Europe’s big chipmakers STMicro and Dialog on Monday.
While year-to-date Nasdaq gains of more than 15 percent have outperformed the wider market, an ebbing of the Trump reflation trade and a slide in U.S. economic surprises deep into negative territory have prompted some investors to review the mix of their portfolios.
Europe’s tech index fell 3.5 percent to put it on track for its biggest one-day loss since Britain’s Brexit vote a year ago. The index had reached a 15-year high earlier this month having soared around 40 percent over the last year.
“It is pretty healthy to have some form of correction in the tech sector to distribute the flows into other sectors,” said ABN AMRO Chief Investment Officer Didier Duret.
The pan-European STOXX 600 was down 0.8 percent, supported by modest gains in oil prices, which lifted shares in energy stocks, and by first round French parliamentary election results which look set to give President Emmanuel Macron a huge majority to push through pro-business reforms.
Italy also offered some support after the eurosceptic 5-Star Movement failed to make the run-off vote in almost all the main cities up for grabs in local elections.
Italian government bond yields fell to their lowest since January and Portugal’s to nine-month lows , while French bonds closed the gap on Germany.
“Macron doing well in the first round of the French parliamentary elections bodes well for him getting a majority,” said Lyn Graham-Taylor, fixed income strategist at Rabobank.
“The fact that 5-Star did poorly in local elections in Italy also suggests a setback for populism in Europe.”
The euro rose back to $1.1220 in the currency markets, where anticipation is building ahead of Wednesday’s conclusion of a two-day U.S. Federal Reserve meeting at which the central bank is expected to nudge up U.S. interest rates.
But economists will be watching to see whether the recent dip in economic data and uncertainty surrounding President Donald Trump has dented confidence.
Britain’s sterling was in focus again as it slipped back below $1.27 and 88.30 pence per euro as Prime Minister Theresa May attempted to prop up her position after last week’s damaging election.
A survey from one of the UK’s biggest business groups showed confidence had been hit hard by the uncertainty left by the election ahead of the start of Brexit negotiations with the EU next week.
May’s plans for leaving the bloc had not changed, her spokesman said on Monday.
“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders,” said Stephen Martin, director general of the Institute of Directors.
“The consequences could – if not addressed immediately – be disastrous for the UK economy.”
The G10 economic surprise index, covering the world’s 10 leading economies, has dipped below zero for the first time in 8 months. JPMorgan, said the “reduced upside risk to growth and inflation” had led it to underweight growth-sensitive stocks and assets in favour of high-income plays.
It is also feeding into dollar weakness. The greenback was a shade lower at 110.040 yen and the dollar index against a basket of currencies nudged down to 97.118, easing back from a nine-day high hit at the end of last week.
In commodities, crude oil prices extended gains after rising on Friday when a pipeline leak in major producer Nigeria overpowered supply worries weighing on the market.
U.S. crude and Brent were both more than 1 percent higher at $46.41 and $48.80 a barrel respectively, copper was steady while gold snapped a three-day losing streak to climb to $1,269 an ounce.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Dhara Ranasinghe, Patrick Graham and Helen Reid in London; Editing by Robin Pomeroy)