British investors hit by US tech stock sell-off
BRITISH investors were caught in the crosshairs of a sharp sell-off in technology stocks that rocked US markets.
On Wall Street shares in tech giants including Tesla, Apple, Amazon and star newcomer Zoom fell by between 5pc and 10pc last night as traders decided to take their money and run.
The tumble wiped 5pc off the Nasdaq and marked an abrupt halt in a rally over the past few months that has taken the stock markets to record highs.
But the surge has split opinion, with bullish observers claiming the rise will continue for years.
Bears, meanwhile, don’t believe that this is a sustainable direction of travel and have braced for a major correction that would be painful for global markets, because so much recent growth has been hinged on the success of these few companies.
UK investors who have invested in US tech companies via Scottish Mortgage Investment Trust were knocked yesterday, with shares in the FTSE 250-listed trust falling by a bruising 6.3pc, or 61.5p, to 907.5p. Others, however, were keen to get in on the action. Hargreaves Lansdown figures show Tesla was the most viewed stock on its platform yesterday, with Scottish Mortgage Investment Trust second and Apple fourth.
Although the fall could trigger a bounceback in share prices in the coming days, the sustainability debate will not be over yet.
The slide on Wall Street took the shine off what had been a promising – or at least stable – day on markets in the UK.
The FTSE 100 fell 1.5pc, or 90.09 points, to 5850.86, while the
FTSE 250 dropped 1.4pc, or 244.73 points, to 17459.69. Construction contractor Costain was one of the day’s most dramatic fallers after it lost out in a long-running dispute with the Welsh government.
They had been arguing over who should foot the bill for a large wall that had to be put up as part of the rebuilding of the A465, which winds through the Brecon Beacons.
An arbitrator decided that the responsibility and extra costs associated with the retaining wall – which hadn’t been budgeted for and was part of the reason the project came in late and over budget – lie with the company.
Costain is still negotiating the final financial settlement fee with the Welsh government.
But shares in the small-cap group plunged by 19.1pc, or 10p, to 42.5p yesterday as the company said it would take a £45m charge in its half-year results next month to adjust the revenue it has received so far under the contract.
Hammerson was also in the red, falling 1.6pc, or 4.7p, to 287.3p following reports that its leading candidate to take over as chief executive, Simon Betty, is set to leave the company.
He will resign and take up a job at a European group, according to media reports, which means the struggling shopping centre owner will not be able to promote an internal successor when veteran boss David Atkins leaves no later than next spring.
In other management moves, Rolex-retailer Watches of Switzerland was up 0.3pc, or 1p, to 325p after announcing its chairman, Dennis Millard, will step down.
But engineering group Keller slid 3.2pc, or 20p, to 610p after it appointed former Serco and Murphy & Sons finance wonk David Burke as its finance boss.
Gem Diamonds lost ground, falling 2.9pc, or 1p, to 33p, after the southern Africa-focused miner’s first-half profits plunged from £15.8m to £2.1m.
It took a hit from pandemicrelated disruptions but the diamond market has also struggled to keep up sales during the coronavirus crisis, hurting companies throughout the supply chain.