The FTSE 100 spent much of Tuesday under pressure before recovering through the afternoon, as a global sell-off in technology stocks weighed on investor sentiment across major markets.
The weakness followed a sharp decline in US technology shares on Monday, with concerns over artificial intelligence profitability continuing to unsettle investors.
South Korean stocks fell more than 9% on Tuesday, extending losses into a third consecutive session as market heavyweights came under pressure amid renewed doubts over AI-related returns and concerns that the US Federal Reserve could adopt a more hawkish stance.
Those worries carried into US markets, where Nasdaq futures were down 3% by lunchtime in London.
When trading opened in New York, the Nasdaq Composite dropped around 2.4% as losses among memory chipmakers fuelled fresh questions about the strength of the AI trade. The S&P 500 fell 1.5%, while the Dow Jones Industrial Average, which has less exposure to technology companies, declined 0.6%.
In London, the FTSE 100 was down 0.3% at midday at 10,402.79 before steadily reducing its losses through the afternoon. Although sentiment remained fragile, the index moved away from its session lows as trading progressed.
The technology-led weakness was also felt among London-listed investment vehicles with exposure to SpaceX. The company was indicated 3.8% lower in New York after tumbling 16% on Monday, marking a third straight day of losses following its historic IPO on 12 June.
As SpaceX’s post-listing momentum faded, shares in some of its UK investors came under pressure. FTSE 100-listed Scottish Mortgage fell 4.6%, while FTSE 250 constituent Baillie Gifford US Growth Trust dropped 3.9%. Mining stocks were also weaker as investors weighed concerns about the global economic outlook.
Away from the broader market decline, Ramsdens stood out among smaller companies after accepting a takeover offer from FirstCash Holdings Inc.
The deal, to be implemented through acquisition vehicle Chess Bidco Ltd, comprises 600p per share in cash alongside a 9p dividend announced earlier this month. The offer values the financial services provider and pawnbroker at up to £206 million on a fully diluted basis and implies a pre-IFRS 16 enterprise value of up to £203 million.
Shares in Ramsdens surged 31% following the announcement.