London open: Stocks in the red as FANG selloff bites
London stocks fell in early trade on Wednesday, taking their cue from a selloff on Wall Street led by the technology sector.
At 0830 GMT, the FTSE 100 was down 0.6% to 6,956.75, while the pound was flat against the euro at 1.1419 and 0.1% lower versus the dollar at 1.4141.
Stocks in the US suffered heavy losses on Tuesday, with Facebook under the cosh as it emerged that chief executive Mark Zuckerberg would testify before Congress following the Cambridge Analytica scandal.
This led to some of their biggest falls in years for the so called 'FANG' stocks of Facebook, Amazon, Netflix and Google owner Alphabet as concern spread about a crackdown on how these companies use personal data prompted a re-examination of how these companies are valued.
Michael Hewson, chief market analyst CMC Markets, said: "With the increasing focus on what is going with respect to how Facebook has managed its users personal data, it must surely be only a matter of time before attention turns to the rest of the tech sector, and how companies like Alphabet, Twitter, Microsoft and Apple to name a few, manage their own users personal data. If lawmakers do turn their attention to the rest of the sector, which seems likely, then it is hard not to see how other tech companies will escape scrutiny on how they use this user data, raising the prospect that we could uncover other practices that invite scrutiny.
"Third party data access is likely to be one area of interest along with what safeguards they have in place with respect to this data, which to all intents and purposes is people’s intellectual property. If further malfeasance is uncovered then the out performance in tech stocks that has been so indicative of the recent run up could well be factor on any run lower, if investors lose confidence any further."
On the data front, the CBI's retail-focused distributive trades survey is due at 1100 BST. Investors will also eye the release of fourth-quarter US GDP data at 1330 BST.
In corporate news, Paddy Power Betfair was on the back foot after saying it has recruited Jonathan Hill from Saga to be the bookmaker’s next chief financial officer. Hill, who will stay at the over-50s company until September, has been Saga’s CFO since 2015.
Miners were dented as the swing in the dollar hurt metals prices, with Antofagasta, Anglo American and Rio Tinto among the big fallers.
Ahead of the acceptance deadline for the deal on Thursday, turnaround specialist Melrose Industries set out details of binding commitments for its proposed hostile takeover of GKN and launched a final effort to assert its credentials as a company committed to the wider UK economy. Shares in both companies were lower.
Insurer Aviva was trading lower as the Financial Conduct Authority said it was considering whether to launch a formal investigation into its decision to ditch plans to cancel its preference shares.
Diploma, the life sciences, seals and controls supplier, was in the red despite reporting "robust" trading in the first half of the year, as sales growth has slowed slightly in the second quarter.
Shire was the standout gainer as it was mentioned in the Telegraph over reheated speculation of takeover rumours with Japanese peer Takeda.
Outside of the FTSE 350, DFS Furniture racked up strong gains as it posted an expected drop in half-year profit and revenue but struck a confident tone on its outlook, bucking the downcast retail trend of late.
Primark owner Associated British Foods gained as it was upgraded to ‘overweight’ at Morgan Stanley. Luxury fashion brand Burberry was in the black as Goldman Sachs lifted it to ‘buy’ and added the stock to its conviction list, while G4S rallied after an upgrade to ‘hold’ at HSBC. Hunting retreated after a downgrade to ‘neutral’ by Macquarie.
Market Movers
FTSE 100 (UKX) 6,956.75 -0.62%
FTSE 250 (MCX) 19,246.66 -0.73%
techMARK (TASX) 3,191.63 -0.29%
FTSE 100 - Risers
Shire Plc (SHP) 3,190.00p 3.91%
G4S (GFS) 248.40p 2.60%
Associated British Foods (ABF) 2,470.00p 1.94%
National Grid (NG.) 773.00p 1.24%
United Utilities Group (UU.) 676.00p 1.14%
Unilever (ULVR) 3,779.40p 1.08%
Burberry Group (BRBY) 1,681.50p 0.69%
Imperial Brands (IMB) 2,349.50p 0.41%
Severn Trent (SVT) 1,747.00p 0.29%
GlaxoSmithKline (GSK) 1,354.60p 0.27%
FTSE 100 - Fallers
Scottish Mortgage Inv Trust (SMT) 438.80p -3.56%
Evraz (EVR) 440.70p -2.63%
Old Mutual (OML) 236.80p -2.23%
Antofagasta (ANTO) 929.40p -1.94%
Mondi (MNDI) 1,896.50p -1.79%
3i Group (III) 852.70p -1.74%
Sage Group (SGE) 638.20p -1.69%
Schroders (SDR) 3,157.00p -1.59%
Anglo American (AAL) 1,655.20p -1.53%
Rio Tinto (RIO) 3,545.00p -1.51%
FTSE 250 - Risers
TI Fluid Systems (TIFS) 246.00p 1.65%
Hill & Smith Holdings (HILS) 1,305.58p 1.52%
Barr (A.G.) (BAG) 632.00p 0.96%
Capita (CPI) 149.85p 0.71%
Ted Baker (TED) 2,516.00p 0.64%
Pennon Group (PNN) 596.60p 0.61%
Mitchells & Butlers (MAB) 248.95p 0.46%
Workspace Group (WKP) 988.50p 0.46%
Stobart Group Ltd. (STOB) 227.50p 0.44%
FDM Group (Holdings) (FDM) 1,020.00p 0.39%
FTSE 250 - Fallers
Polar Capital Technology Trust (PCT) 1,082.00p -2.70%
Weir Group (WEIR) 1,935.00p -2.10%
Investec (INVP) 545.60p -1.98%
Sophos Group (SOPH) 460.66p -1.94%
Softcat (SCT) 662.00p -1.93%
Rotork (ROR) 275.70p -1.92%
SIG (SHI) 131.50p -1.87%
Hikma Pharmaceuticals (HIK) 1,113.00p -1.85%
Hunting (HTG) 668.00p -1.76%
JPMorgan American Inv Trust (JAM) 371.61p -1.69%