London pre-open: Stocks to fall after US tech selloff

(Sharecast News) - London stocks were set to fall at the open on Tuesday following a technology selloff on Wall Street.

The FTSE 100 was called to open around 1% lower.

Ipek Ozkardeskaya, senior analyst at Swissquote, pointed out the Nasdaq was pulled lower by big tech stocks following news that SpaceX has kicked off its first investment grade bond sale to raise $20bn. She said the move was "quite unusual for a company that is burning cash".

"Seemingly, the recent IPO did not suffice to assuage the company's funding needs - a reminder of how much money may still be burned on the way to Mars," she said. "SpaceX shares fell more than 16% yesterday, reducing the post-IPO rally to less than 15% - still substantial given that the company's valuation remains massive by traditional metrics.

"Again, SpaceX is not yet part of the Nasdaq indices, but the fact that it is jumping on the bond train to fund excessive AI and infrastructure spending revives earlier concerns that Big Tech may be spending too much on AI infrastructure and increasingly financing that spending through debt. Morgan Stanley expects global AI-related borrowing to surpass half a trillion dollars this year, meaning that corporate bond indices are increasingly becoming dominated by the AI theme as well."

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

Meanwhile, oil prices were lower, with Brent crude down 1.4% at $76.78 a barrel and West Texas Intermediate 1.2% lower at $72.97.

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".

In UK corporate news, Telecom Plus said it expected 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.

The company, which trades as Utility Warehouse offering product bundles, reported a 4.7% rise in adjusted pre-tax profit to �132.2m in the year to 31 March.

Adjusted 2026/27 profit is expected to be in the range of �80m to �90m, reflecting the plan's first year of investment with a target of �175m by 2031.

Bunzl boosted annual guidance following an "encouraging" start to the year.

Updating on trading, the packing and business supplies giant said group revenue grew by around 4% on a constant currency basis in the six months to 30 June, supported by a robust performance in North America, Bunzl's biggest market.

As a result, it now expects annual revenue growth to be driven by modest underlying revenue improvements alongside a "small benefit" from acquisitions and inflation.

Student accommodation provider Unite Group said that CPPIB Holdco has cut its stake in the company to 7%, triggering the departure of its nominated board representative, Thomas Jackson.

Unite said Jackson had stepped down as a nonexecutive director with immediate effect. He joined the board in 2019 following Unite's acquisition of Liberty Living from CPPIB, under a relationship agreement that allowed the Canadian investor to appoint a director while its shareholding remained above 10%.

With CPPIB's holding now below that threshold, Unite said the entitlement no longer applies.