FTSE 100 shares finished the week in the red as weakness across global technology stocks, combined with inflation concerns and geopolitical uncertainty, kept investors cautious, leaving London’s blue-chip index down 0.2% at 10,508.02 while the FTSE 250 slipped 0.1% to 23,147.19.
Selling pressure was not confined to the UK. France’s CAC 40 lost 0.6% and Germany’s DAX 40 dropped 1.3%, reflecting a broader retreat from risk assets after another volatile week for global markets.
Technology remained at the centre of the sell-off after reports that OpenAI is considering delaying its widely anticipated initial public offering until 2027, denting enthusiasm for artificial intelligence-related investments at a time when the sector was already facing fresh headwinds.
In New York, the Nasdaq Composite fell 0.2% while the S&P 500 edged lower, leaving both indices nursing weekly losses of more than 4% and nearly 2% respectively. The Dow Jones Industrial Average also slipped during Friday’s session but still managed a modest weekly gain.
Pressure on technology shares has also been fuelled by rising costs across the semiconductor supply chain. Apple recently increased prices for MacBooks and iPads, highlighting mounting expenses for memory and storage components, while strong earnings from Micron reinforced expectations that higher chip prices are likely to persist, squeezing device manufacturers.
At the same time, expectations that the US Federal Reserve could still raise interest rates later this year continued to weigh on growth stocks after May’s reading of the Personal Consumption Expenditures inflation index showed price pressures remain difficult to tame.
Asian stocks remained under pressure, with South Korea’s Kospi falling 5.8% after another volatile session for chipmaker SK hynix, whose shares dropped 8.4%, while Japan’s Nikkei 225 lost 4.2% as technology investment giant SoftBank slumped 13%.
Against that backdrop, investors rotated into defensive names on the FTSE 100, with British American Tobacco up 1.1% after announcing a new share buyback programme running from next Tuesday to 29 July, while Imperial Brands added 0.8%, and supermarkets also attracted buyers, with Tesco rising 1.1% and J Sainsbury advancing 1.5%.
Croda International fell 4.9%, Whitbread declined 2.9%, Barclays lost 2.0% and mining giant Glencore eased 1.3%.
Housebuilders also struggled following reports that Andy Burnham, widely viewed as the likely next UK prime minister, is considering replacing council tax and stamp duty with a single annual property tax.
Barratt Redrow slipped 1.3%, Persimmon fell 1.7% and Berkeley Group dropped 3.6%, with the decline compounded by a Berenberg downgrade to ‘hold’ from ‘buy’ after the broker argued the company’s recent share price performance had reduced its valuation appeal relative to peers.