Tech gains turn to dust

Chris Beauchamp IG

While tech stocks suffer further losses the FTSE 100 has managed to contain its losses, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.

FTSE 100 boosted as tech rout returns

Faced with a market that is indulging itself in fresh panic over tech stocks, investors have moved back into the FTSE 100. Dip buyers have appeared after a very rocky start this morning, with the selling concentrated in the mining sector thanks to the rout in precious metals and in aviation thanks to concerns about a renewal of conflict in the Middle East. Overall this still looks like a market rotation out of tech, with the FTSE 100’s less demanding valuation once again proving the index’s biggest asset.

Bigger clearout needed in tech stocks?

It is understandable that investors thought a bottom had occurred over the weekend, but investing is rarely that easy. The peak-to-trough move earlier in October was only 7%, falling short even of July’s modest 11% pullback. While the losses of the last three weeks have been painful, a longer-term view shows that the Nasdaq 100 is still up nearly 30% from the end of March. A little bit more fear might, in the long-run, be healthy for tech.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

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