The FTSE 100 was set to fall today after sharp sell-offs hit US tech stocks again overnight.
Facebook fell sharply after reports that it was set to face a monopoly investigation from the Federal Trade Commission and the Nasdaq index of technology shares had a rough session of sell-offs.
Google is also facing similar probes, and the Facebook concerns served as a new warning to investors that the sky-high valuations of technology shares may be based on thin foundations.
That said, investors are still being pushed into tech stocks in the absence of returns elsewhere. Worldwide interest rates remain super-low, with few signs that any central bankers are looking to tighten monetary policy. Last night saw the US Federal Reserve and Bank of Japan retain their stance of monetary stimulus and the Bank of England is set to follow suit at lunchtime today.
Given the low inflationary environment, there is little to dissuade central banks from their current policies aimed at boosting weak economic growth and protecting investment, and most investors expect the Bank of England to do more stimulus later in the year.
The FTSE-100 Index was set to open down 33 at 6045, according to trading on CMC Markets. The Dax in Germany was called down 140 at 13,115 and the Cac-40 in France off 54 at 5020.
Yesterday's star flotation in London, The Hut Group, may see a sell-off as a result of the Nasdaq declines.
Shares in the company, which helps major corporates sell their wares online to consumers, shot up on day one of dealings and may well lose much of that froth today. London bankers will still be proud at getting such a prestigious tech float away over here, however. Traditionally, promising tech groups have only wanted to list in the US, where the investment community is more used to their unorthodox ways.
Another London tech float of note, Trainline, reports figures today which will not be pretty, given the collapse of train passenger numbers in Covid.
Research firm Third Bridge pointed out ahead of the figures that commuting volumes and planned business travel will only recover 60% by 2022 as the virus accelerates a decade-long decline in rail season ticket sales. Trainline will have benefited short-term from travellers' preference for e-ticketing during the pandemic but advance purchase rail ticket sales only account for around one-in 10 purchases. "The headroom for growth by Trainline in other ticket categories is limited," said Third Bridge's Dan Thomas.