The London Stock Exchange endured a bruising session on Thursday as the blue-chip FTSE 100 index closed sharply lower, mirroring a global downturn in technology stocks and dampened investor sentiment.
The FTSE 100 fell by 0.6%, shedding 45 points to finish at 7,471. The mid-cap FTSE 250 also felt the pressure, dropping 0.3% to settle at 18,630. The sell-off was largely driven by a significant plunge in US tech giants, which sent shockwaves across international markets.
Global Tech Rout Hits London
Wall Street's 'Magnificent Seven' tech stocks, including Tesla and Meta, were at the epicentre of the storm. Tesla shares plummeted by over 4% following a report by The Wall Street Journal that raised serious questions about CEO Elon Musk's personal drug use and its potential impact on his companies. This triggered a broader crisis of confidence in the high-flying tech sector.
Further compounding the issue, it was revealed that Tesla director Larry Ellison, a close ally of Musk, has not participated in a single board meeting in the past year. This news added to the growing concerns over corporate governance at the electric vehicle pioneer.
Corporate Earnings Disappoint
The negative momentum was fuelled by a slew of disappointing corporate updates. B&M European Retail saw its shares slump by 5.5% after reporting a slowdown in sales growth. Similarly, Watches of Switzerland Group's stock cratered by a staggering 36% after the luxury timepiece retailer slashed its profit guidance, blaming a challenging economic environment.
These results spooked investors, leading to a broad-based retreat from riskier assets. The gloomy mood overshadowed more positive news from the oil sector, where Shell and BP saw modest gains supported by firmer crude prices.
Market Analysts Weigh In
Market analysts pointed to a 'perfect storm' of negative catalysts. 'Investors are grappling with a triple threat,' commented one senior analyst. 'We have mounting worries over corporate governance in the world's largest tech firms, a softening consumer outlook evidenced by the retail earnings, and persistent uncertainty over the timing of interest rate cuts. It's no surprise we're seeing a flight to safety.'
All eyes will now be on the US monthly jobs report, due for release on Friday, which could significantly influence the Federal Reserve's next move on interest rates and determine whether this rocky period for markets will extend into the weekend.
