Investors who used London-listed funds to access the seemingly unstoppable US tech rally posted heavy losses yesterday.
The likes of Scottish Mortgage Investment Trust and Allianz Technology Trust have been in demand over the past year among British private shareholders who prefer not to buy directly from companies like Apple, Facebook, Google owner Alphabet and Netflix.
But the boom since markets bottomed out last spring could be easing now.
The boom since the markets bottomed last spring now appears to be crumbling as the seemingly unstoppable US tech rally took heavy losses yesterday.
There are a few problems here. One is the growing concern that skyrocketing market valuations the companies have accumulated – with Apple, for example, becoming the first public American company to be worth more than $ 2 trillion (£ 1.4 trillion) in August – is going too far and now a correction.
Another point is the prospect that a global recovery will drive up inflation and interest rates, harming the appeal of fast-growing stock market companies. And another is Tesla boss Elon Musk’s quest for bitcoin, creating an uncomfortable link between the cryptocurrency and the electric car giant.
Amid the drama of the most recent bitcoin explosion, Tesla put £ 1.1 billion of bitcoin on its balance sheet early this month. But peaking at $ 900 a share last month, Tesla closed at $ 699.
Stock Watch – Sigma Capital
Rental house group Sigma Capital will build 75 homes at a site in Perth, Scotland, in partnership with Springfield Properties to build the two, three and four bedroom homes.
The properties will generate approximately £ 760,000 in rent per year, while the gross development cost, including the purchase of the land, will be nearly £ 12 million.
Shares in AIM-listed Sigma Capital, whose boss Graham Barnet said there was a “ significant under-supply ” of quality rental housing in Scotland, rose 1.3 percent, or 2 pence, to 157.5 pence.
Meanwhile, bitcoin fell to USD 44,896 yesterday after hitting a record high of USD 58,445 two days earlier. Growing question marks and nerves about how long the tech party will last saw the Nasdaq index drop by a whopping 1.4 percent yesterday as companies like Apple and Amazon fell during early trading.
Back on this side of the pond, the Scottish Mortgage Investment Trust fell 5.1 percent, or 64 pence, to 1,203 pence.
Allianz Technology Trust fell 6.4 percent or 195p to 2855p, Baillie Gifford US Growth Trust fell 7.1 percent, or 25p, to 329p, and Edinburgh Worldwide Investment Trust lost 6 percent, or 24p, against 374 pence.
The latest bitcoin dive ricocheted through Argo Blockchain (which fell 20.5 percent or 55 cents to 213 pence) and AIM-listed online Blockchain (19.2 percent or 17.5 pence to 73.5 pence.
Beyond tech companies, however, the celebration of Boris Johnson’s roadmap out of lockdown continued unabated.
The FTSE 100 closed 0.2 percent higher, up 13.7 points, to 6625.94, while the FTSE 250 added 0.4 percent or 76.63 points to 21,057.72 as traders piled up in travel and leisure shares.
Cineworld rose 9.5 percent, or 8.32p, to 96.36p and conference group Informa climbed 3.5 percent, or 18.6p, to 555.2p.
The prospect of a return to offices and retail increased Land Securities’ commercial landlords 4.5 percent, or 27.9 pence, to 655.5 pence and British Land 5.4 percent, or 25.8 p, to 501.2 pence .
The latter received an extra boost after hiring former Chief Financial Officer John Lewis Loraine Woodhouse as a non-executive director.
Easyjet went 4.5 percent, or 40.2p, to 932.4p after it said the lockdown roadmap caused an increase in bookings.
The founder, Sir Stelios Haji-Ioannou, chose this time to look at more stocks. He and his family reduced their share of the airline from 28.7 percent to 27.7 percent.
Stock market documents did not say how much Stelios made from the sale, but it is believed to have raised around £ 32 million.
Business restructuring group Begbies Traynor – up 5.4 percent, or 5.5p, to 108p – said the business recovery and financial advisory divisions are doing well, putting them in line with earnings targets.
And lender Non-Standard Finance shot 20.9 percent, or 0.74p, up to 4.25p after it said it should help save the company and keep it from defaulting on its loans. The largest shareholder, Alchemy, supports the idea of selling new shares.
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