The FTSE 100’s defensive attributes were on display on Wednesday after tech shares sent US indices sharply lower overnight.
The S&P 500 closed 1.1% lower, while the tech-heavy NASDAQ sank 2.2%.
US tech names, including Nvidia, Tesla, Micron Technology, Uber, Dell, and Palantir, were all heavily hit by concerns about lofty valuations throughout the sector.
“The AI-investment boom that has fuelled the rally in 2025 has created exceptionally high expectations for continued earnings growth, but recent signs of cooling demand, rising costs, and tighter policy conditions have prompted investors to question whether those valuations are still justified,” said Daniela Hathorn, Senior Market Analyst at Capital.com.
Europe lacks significant exposure to tech shares, especially those that have been bid up to eyewatering valuations, so there was minimal fallout in London on Wednesday.
“Market jitters around US tech stocks might have put investors on the edge of their seats, but yesterday’s sell-off wasn’t severe enough to cause widespread panic,” said Russ Mould, investment director at AJ Bell.
“A 2% decline in the Nasdaq index and a 10.7% jump in the Vix fear gauge were like a sharp bout of turbulence on a flight – unpleasant, but just for a moment. The fact a major sell-off didn’t occur across the whole of Asian and European markets following Wall Street’s wobble implies that we’re not at the start of the correction many people have feared. Futures prices point to a less dramatic day in the US when trading opens later today.”
The FTSE 100 was trading down around 0.1% at the time of writing, but is less than 1% away from all-time highs.
Coca-Cola Europacific Partners was the FTSE 100’s top riser, up 1.9%, after the drinks firm reaffirmed guidance after steady growth in its European business.
Damian Gammell, Chief Executive Officer of Coca-Cola Europacific Partners, said: “2025 continues to be a solid year for CCEP, reflecting our great brands, great people, great execution and strong relationships with our brand partners and customers. We’ve delivered another quarter of volume growth in Europe, despite softer consumer demand. We continue to drive underlying growth in APS, excluding portfolio changes in Australia, and despite macro driven challenges in Indonesia.
Barratt’s was also among the gainers after releasing a trading statement that pointed to resilience amid concerns about the upcoming budget. Shares were 1.7% higher at the time of writing.
Weir Group was the FTSE 100’s top faller, dropping 2.3%, as investors took the release of a Q3 trading update as a cue to book profits. There was nothing overtly negative about their update with guidance maintained.
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