Tech stocks soar after disappointing US jobs report

The UK’s technology stocks notched up a strong performance on Wednesday as investors across the pond ran to the US tech giants.

The popularity of the FANGs – Facebook, Amazon, Netflix and Google – in New York helped lift their smaller technology-driven counterparts in the UK, said IG chief market analyst Chris Beauchamp.

“The FTSE 100 has spent the day giving back its earlier strong gains, and while ‘tech names’ like Just Eat Takeaway and Ocado have made headway it is miners that have trimmed the opening bullishness of the index,” he said.

The popularity of the US tech stocks was explained by jobs figures out of the country on Wednesday.

According to a report from the ADP Research Institute, the economy created 374,000 jobs in August, below what had been expected.

Mr Beauchamp said that the technology stocks gained as they “found renewed appeal among investors worried that the economic rebound that was supposed to be so good for physical economy stocks is beginning to fade, and that it is time to return to faithful names like Apple and Amazon, known for their powers of cash generation.”

It helped push the UK’s FTSE 100 index up by 0.4% at the end of the day. It ended at 7,149.84 points, a rise of 30.14.

In New York, the Dow Jones was trading down 0.1% while the S&P 500 had gained 0.2% when markets closed in Europe.

On the continent, the Dax dropped 0.1% while the Cac 40 in Paris rose 1.2%.

Sterling rose less than 0.1% against both major rivals. By the end of the day a pound could buy 1.3789 dollars or 1.1635 euros.

Despite saying that its sales were slightly ahead of expectations for the past year, WH Smith saw its shares drop 3.8% on Wednesday.

Investors were more interested in the predictions for the next financial year, which were less rosy.

The business said that next year profits will be at the bottom of previous guidance. In the six months to the end of August sales were less than two thirds of their 2019 levels.

Wetherspoon became the latest in a line of hospitality venues to warn of problems in its supply chains after struggling to get enough Carling and Coors beer.

But investors were not put off by the news and shares closed up 0.5%.

The biggest risers on the FTSE 100 were Just Eat Takeaway.com, up 496p to 7,055p, Informa, up 25.4p to 556.4p, Ocado, up 73p to 2,086p, JD Sports, up 30.5p to 1,040p, and Rightmove, up 19.2p to 720.6p.

The biggest fallers on the FTSE 100 were Prudential, down 34p to 1,481p, United Utilities, down 9.7p to 485.7p, Antofagasta, down 22p to 1,434p, BHP, down 26.5p to 2,231p, and Fresnillo, down 10p to 844p.