FTSE 100 lower with Scottish Mortgage trust leading the retreat; Wall Street
Tech shares appear to be out of fashion this week, as the US Nasdaq gave up more than 1%
- The FTSE 100 down 6 points
- Tech stocks out of favour
- Centricafriendless after downbeat trading update
12.05pm: Major diversion among US indices as midday
The FTSE 100 ended down 6 points at 7,124, while the FTSE 250 lost 78 points, 0.3%, to close at 22,697.
“Sterling traders seem unperturbed by the prospect of the UK economy moving into another period of political uncertainty, as the elections put the SNP’s independence plan back on the agenda,” IG Chief Market Analyst Chris Beauchamp wrote. “An attritional battle through the courts to decide on the legality of a referendum seems likely, taking some of the shine off the prospects for the UK economy. Nonetheless, with the dollar now finding it harder to rally in the wake of the non-farms report it looks like sterling can still make headway for the time being.”
In the US, the Dow was up 276 points, 0.8%, at 35,054 at midday. The Nasdaq Composite, meanwhile, was down 173 points, 1.3%, to 13,580, and the S&P 500 added less than a point to 4,233.
“The Dow seems to be in a world of its own, crossing the 35,000 mark for the first time in its history thanks to a bounce in healthcare and retail names,” Beauchamp wrote. “But with earnings season winding down and strong seasonality now behind us for the time being it looks like indices will continue to struggle; historically May is a month of digestion for indices, representing a slowdown in forward momentum from the opening months of the year, and if Friday’s jobs report isn’t enough to move the market on into new territory then it is hard to see what will.”
3.42pm: A strong showing by sterling on foreign exchange rates has proved too big a burden for the Footsie to carry.
After a moderately positive morning, the FTSE 100 was down 21 points (0.3%) in the last hour of trading at 7,109.
Scottish Mortgage Trust PLC (), down 5.8% at 1,144p, led the retreat as tech shares appear to be out of fashion this week; the investment trust is a big holder of some of the biggest names in the global tech world.
Having ascribed the Footsie’s travails to the strength of sterling, it is worth noting that the mid-cap FTSE 250, which normally regards a strong exchange rate with the same enthusiasm that an MP regards an offer to refurbish a dwelling free of charge, is faring worse, down 101 points (0.5%) at 22,674, thanks in no small part to a number of investment trusts taking a bath for much the same reason as the FTSE 100 Scottish Mortgage Trust.
British Gas owner () was also a loser, shedding 0.7% at 57.18p after it said trading is continuing to be difficult with the impact of the COVID-19 lockdown and its dispute with engineers affecting boiler installations.
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