FTSE 100 stocks have taken a dive this morning after a set of poor earnings reports and American markets suffering their worst day in two years.
While UK markets managed to maintain stability yesterday, the wave of negative sentiment sweeping across the US and Asia seems to have finally come to our shores, as the FTSE 100 and FTSE 250 both fell one per cent in the hour after opening.
Yesterday, the Nasdaq 100 had over a trillion dollars wiped off it, while the S&P 500 fell 2.3 per cent, with Tesla and Alphabet falling 12 per cent and five per cent respectively.
Other drawdowns globally included a six per cent drop from Taiwan Semiconductor and a seven per cent fall from South Korean SK Hynix, which produces key components for AI systems.
“If there was a bubble in the AI and Magnificent Seven part of the market, then last night saw it pop,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.
Negative sentiment has begun to creep back into UK markets over fears that the tech rally that has propelled returns over the last year may finally be starting to peter out.
Meanwhile, UK markets and the FTSE 100 were also hurt by large companies reporting a wave of poor results today.
Rentokil has dropped over seven per cent this morning, after revenue revenue rose only 1.3 per cent in the first six months of 2024, despite big hopes about a North American expansion.
Other companies included BT Group, which has dropped 3.3 per cent after reporting a decline in revenue for its first quarter, and Lloyds Bank (down 1.7 per cent) after a surge in costs and a slowdown in the amount of cash it was making on the back of interest rates
In the FTSE 250, those reporting unimpressive results today included ITV (four per cent drop) and miner Centamin (seven per cent drop).