London close: FTSE ends well off lows, helped by lack of tech stocks

(Sharecast News) - London stocks ended just a touch lower on Tuesday, paring earlier losses thanks in part to its relative lack of exposure to the tech sector.

The FTSE 100 closed down just 0.1% at 10,428.85, having suffered heavier losses earlier in the day as sentiment was hit by a tech selloff in the US on Monday, where SpaceX tumbled 16% on news it has kicked off its first investment grade bond sale to raise $20bn.

Alphabet also fell sharply after Google Deepmind director and senior research scientist John Jumper left the division after a nine-year stint to move to Anthropic. Just last week, a key figure in Google's Gemini team, jumped ship to OpenAI.

Danni Hewson, head of financial analysis at AJ Bell, said: "AI might have been the fuel that's kept global stock markets fired up despite global instability, but the amount of cash flowing through all those tech companies has made some investors uncomfortable, especially as the US Federal Reserve may have to hike rates to combat inflation.

"US markets followed Asian counterparts down today, as FOMO was replaced with a fear of being burnt if the now expected chunky earnings numbers don't continue to surge.

"SpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it's come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut.

"Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.

"For a stock like SpaceX, a lot of decision making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved."

Hewson said the relative lack of tech stocks on London markets had helped the FTSE 100 to stay afloat.

On the political front and according to The Times, Andy Burnham will make a speech next week in which he will pledge to grow the economy and commit to Labour's fiscal rules, as he prepares to enter Downing Street following Keir Starmer's resignation.

Neil Wilson, UK investor strategist at Saxo Markets, said markets still trying to figure out what Burnham means for the economy and markets. "Who's the chancellor is a big signal not just about the substance of their priorities but also the tone of the new regime in terms of just being about Burnham and supporters or a genuine reset," he said.

"We don't know much about his actual economic plans... we should hear more next week in a speech, in which he will seek to reassure markets."

He added: "The biggest tail risk for UK assets would be if an emboldened Burnham (And why not be bold given the momentum?) makes 'brave' decisions (to borrow from Sir Humphrey) on tax and spending."

Meanwhile, oil prices were lower, with Brent crude down 1.3% at $76.87 a barrel and West Texas Intermediate 1.2% weaker at $72.95 after the US waived sanctions on Iran for 60 days from Monday following the first talks to negotiate a peace deal. US Vice President JD Vance said on Monday that his talks with senior Iranian officials in Switzerland had created a "good foundation for a successful final deal".

Investors were also mulling S&P Global's flash UK PMI for June and the latest manufacturing survey from the Confederation of British Industry. The former showed the economy continued to falter in June, weighed down by sustained weakness in the service sector, while the latter revealed that manufacturing order books fell to a six-year low.

In equity markets, heavily-weighted miners slumped, with Antofagasta, Anglo American, Rio Tinto and Glencore all lower. Patrick Munnelly at Tickmill Group said: "The sector was hit by weaker commodity sentiment, concern over global demand and renewed uncertainty around the durability of the US-Iran truce."

Scottish Mortgage Investment Trust - which has significant exposure to the US tech sector - was among the worst performers on the FTSE 100.

Raspberry Pi, which makes high-performance, low-cost single-board computers (SBCs), microcontrollers, and computing accessories, also suffered heavy losses.

Telecom Plus tumbled after saying it expects earnings next fiscal year to be lower as it launched an ambitious five-year plan to more than double multi-service customer numbers to one million.

On the upside, Bunzl was the biggest riser on the FTSE 100 as it boosted annual guidance following a stronger-than-expected start to the year.

Market Movers

FTSE 100 (UKX) 10,428.85 -0.09%

FTSE 250 (MCX) 22,926.47 -1.17%

techMARK (TASX) 5,783.68 -0.30%

FTSE 100 - Risers

Bunzl (BNZL) 2,602.00p 5.60%

British American Tobacco (BATS) 4,585.00p 3.13%

Diageo (DGE) 1,551.50p 2.27%

BT Group (BT.A) 196.85p 2.26%

AstraZeneca (AZN) 13,590.00p 2.26%

Admiral Group (ADM) 3,378.00p 2.18%

Babcock International Group (BAB) 1,004.50p 2.04%

Entain (ENT) 556.20p 1.79%

GSK (GSK) 1,957.50p 1.71%

Metlen Energy & Metals (MTLN) 42.66p 1.67%

FTSE 100 - Fallers

Antofagasta (ANTO) 3,740.00p -5.46%

Fresnillo (FRES) 2,853.00p -5.15%

Anglo American (AAL) 3,710.00p -4.99%

Glencore (GLEN) 535.30p -4.22%

Rio Tinto (RIO) 7,264.00p -3.31%

Scottish Mortgage Inv Trust (SMT) 1,395.00p -3.29%

Burberry Group (BRBY) 1,070.00p -2.95%

Weir Group (WEIR) 2,356.00p -2.48%

Spirax Group (SPX) 6,800.00p -2.44%

IMI (IMI) 2,942.00p -2.32%

FTSE 250 - Risers

Hays (HAS) 32.24p 7.18%

Diversified Energy Company (DI) (DEC) 997.00p 3.21%

Wizz Air Holdings (WIZZ) 1,213.00p 3.06%

Pagegroup (PAGE) 106.50p 3.00%

Applied Nutrition (APN) 304.00p 2.70%

Shawbrook Group (SHAW) 327.50p 2.34%

easyJet (EZJ) 529.60p 2.24%

Worldwide Healthcare Trust (WWH) 363.00p 1.97%

Hikma Pharmaceuticals (HIK) 1,515.00p 1.88%

Ocado Group (OCDO) 173.60p 1.76%

FTSE 250 - Fallers

Telecom Plus (TEP) 710.00p -25.73%

Raspberry PI Holdings (RPI) 764.00p -13.96%

Ceres Power Holdings (CWR) 604.50p -10.64%

Hochschild Mining (HOC) 516.00p -6.10%

Pacific Horizon Inv Trust (PHI) 1,176.00p -6.07%

Partners Group Private Equity Limited. (EUR) (PEY) 7.96p -5.01%

Templeton Emerging Markets Inv Trust (TEM) 332.50p -5.00%

Pan African Resources (PAF) 104.00p -4.76%

The Schiehallion Fund Limited NPV (MNTN) 2.01p -4.74%

Rosebank Industries NPV (ROSE) 319.00p -4.49%