Market Report: Investors dump riskier stocks and light up traders' screens with red
Technology shares, perceived as riskier investments for their typically higher valuations against earnings, were also offloaded
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Your support makes all the difference.Investors switched back into panic mode yesterday, dumping riskier stocks and lighting up traders’ screens with red. Even with Chinese markets shut all week for its new year, the FTSE 100 plunged 158.70 points or 2.7 per cent to 5,689.36, with the sell-off gathering pace as the day progressed, particularly when Wall Street opened sharply lower.
Banks, which carry more weight than any other sector, bore the brunt of the fears about the global economy, with Barclays down 9.25p or 5.3 per cent to 163.9p and Standard Chartered diving 26.05p or 5.8 per cent to 427p.
Housebuilders, including Berkeley Group, 261p or 7.7 per cent cheaper at 3,129p, also took a beating.
Technology shares, perceived as riskier investments for their typically higher valuations against earnings, were also offloaded. Mobile payments firm Worldpay was the heaviest blue-chip faller, down 26.2p or 8.7 per cent to 275.6p, while on the mid-cap index, the losers included cyber security software firm Sophos, which slumped 25.6p, or 11 per cent, to 206.2p, and online takeaway firm Just Eat, which collapsed 37.7p or 9.9 per cent to 341.7p.
Fears that G4S could suffer a downgrade from ratings agencies and subsequently issue another load of shares to bolster its balance sheet sparked a rush for the exit.
When S&P last cut its rating from BBB-/stable to BBB-/negative, the security group tapped investors for £343m to avoid any further downgrades. The shares, now on the FTSE 250 after their recent relegation, fell 11.9p to 197.5p as broker Jefferies, which flagged the concerns, cut its stance to underperform.
On AIM, Barbados hotels operator Elegant Hotels avoided the carnage, unchanged at 110.5p as it agreed to buy Swiss International, the owner of the Waves Hotel and Spa, for $18m (£12.5m).
Elsewhere, investors hung up on The People’s Operator, Wikipedia founder Jimmy Wales’s AIM-listed mobile venture, which plummeted 21.5p to 52.5p. Traders said the thinly traded stock suffered when Winterflood Securities sold 58,000 shares at 55p on behalf of clients.
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