The FTSE 100 fell on Friday as the world was hit by widespread technology outages that disrupted trade on the LSE, grounded planes and prevented some bankers from logging into their systems.
Many investors were experiencing difficulties placing trades with orders being rejected and some brokers issuing notices warning of disruption to their service.
The London Stock Exchange’s RNS system was out of action on Friday with corporates unable to login to publish regulatory news. FTSE price feeds were also disrupted in the early minutes of trade, but this was quickly rectified.
“The world grinding to a halt because of a global IT meltdown shows the dark side to technology and that relying on computers doesn’t always make life easier,” said Dan Coatsworth, investment analyst at AJ Bell.
“Countless industries, from airlines and trains to banks and media, face disruption to earnings if they cannot do their job. Workers cannot get from A to B and that will have a knock-on effect for industries across the board if staff aren’t there to perform important functions or systems are offline.
“The severity of the problem boils down to how long it lasts. A few hours’ disruption is unhelpful but not a catastrophe. Prolonged disruption is another matter, potentially causing damage to companies and economies.”
The FTSE 100 was down 0.4% to 8,171 at the time of writing and was recovering from the worse levels of the session as the initial panic subsided.
Notwithstanding the hysteria surrounding the breakdown in technology systems, the European equity space was set for a softer session after another drop in US tech shares overnight that hit futures.
With companies facing difficulties issuing news, the macroeconomic environment was in the driving seat on Friday when it came to FTSE 100 stocks.
Mounting concerns about the health of the Chinese economy was reflected in another weaker session for the miners as Glencore, Anglo American, and Rio Tinto trading negatively.
Burberry continued its dismal run with a 3% decline. Shares in the luxury brand are now worth less than a third of its 2023 high.
Beazley was the FTSE 100’s top faller presumably on concerns about the fallout of the technology sector disruption and potential claims. Beazley shares were down 7% at the time of writing.