GLOBAL MARKETS-European shares steady as tech-led selloff jitters cool

Updates after morning European trading, adds comments

By Rae Wee and Jaspreet Kalra

SINGAPORE, Aug 20 (Reuters) - European shares steadied on Wednesday, as a tech-led selloff on Wall Street that has rippled through equity markets eased, while currency and rates traders honed in on a key meeting of central bankers later this week.

The pan-European STOXX 600 index .STOXX was nearly flat after declining by as much as 0.4% earlier in the day, pressured by weakness in tech and defence sector stocks.

That early weakness followed a fall in Asian markets, where tech-heavy indexes were the biggest losers after the NASDAQ composite index .IXIC dropped nearly 1.5% on Tuesday.

Futures on the tech-heavy NASDAQ were just 0.2% lower on Wednesday, however, suggesting a calmer open ahead. NQcv1

While there was no major trigger for the selloff in tech stocks, analysts pointed to a confluence of factors, including concerns over high valuations, a general risk-off mood and U.S. President Donald Trump's growing influence over the sector.

"I think we were priced for perfection in the U.S. and there was a quite a lot of complacency in markets, so some summer volatility should have been expected," said Ben Laidler, head of equity strategy at BRADESCO BBI.

Trump's influence on the U.S. tech-sector has also been in focus for investors. U.S. Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel as well as other chip companies, two sources told Reuters.

While the individual developments may be brushed aside by markets, they fall into the broader bucket of concerns over the institutional framework in the United States, Laidler said.

The potential move comes on the back of other unusual deals Washington has recently struck with U.S. companies, including allowing AI chip giant Nvidia NVDA.O to sell its H20 chips to China in exchange for the U.S. government receiving 15% of the revenue from those sales.

In commodities, Brent crude futures LCOc1 were last up 1.1% at $66.55 a barrel as investors awaited the next steps in talks to end Russia's war on Ukraine, with uncertainty over whether oil sanctions might be eased or tightened.

While a meeting between Trump, Ukrainian President Volodymyr Zelenskiy and a group of European allies concluded without much fanfare, Trump said the United States would help guarantee Ukraine's security in any deal to end Russia's war there.

"The U.S. is not categorically underwriting anything, any security for Ukraine, even if they're open to provide some, because we don't know the conditions under which they will. So there's quite a bit of risk left out there," said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho.

Elsewhere, Sweden's central bank kept its key interest rate on hold as expected on Wednesday, while the Reserve Bank of New Zealand cut policy rates to a three-year low and signalled further easing, sending the kiwi NZD=D3 down by over 1%.

AWAITING JACKSON HOLE

The focus is now on the Kansas City Federal Reserve's August 21-23 Jackson Hole symposium, where Fed Chair Jerome Powell is due to speak on the economic outlook and the central bank's policy framework on Friday.

Powell's remarks on the near-term outlook for rates will be keenly watched as traders are almost fully pricing in a rate cut next month. 0#USDIRPR

The minutes of the Fed's July policy meeting are due later on Wednesday, but are unlikely to spur meaningful market reactions as they pre-date weak U.S. labour market data that spurred a firming of rate cut expectations.

The dollar was steady against the euro EUR=EBS at $1.1646. Sterling GBP=D3 was flat at $1.3498 after rising slightly in immediate reaction to data that showed UK inflation its highest in 18 months in July.

The fact this was not even worse meant under-fire British government bonds rallied on the news, with the benchmark 10-year gilt yield down 5 basis points at 4.69%. GB10YT=RR GB/

The 10-year Treasury yield was marginally lower at 4.29%. US10YT=RR

"We expect the dollar to depreciate largely because US economic performance no longer supports the currency’s high valuation, and we think the softening labor market is providing late-summer support to that view," analysts at Goldman Sachs said in a note.

Elsewhere, spot gold XAU= rose 0.3% to $3,326.89 an ounce. GOL/

(Additional reporting by Rae Wee. Editing by Sonali Paul and Mark Potter)

((Rae.Wee@thomsonreuters.com;))