Tech selling weakens Europe

Following another bout of tech selling across the pond yesterday, Europe opened mildly weaker; the FTSE has shed 23 points to 6775, with BP (-0.7%) one of those losing its dividend pay-out attraction this morning.   

Yet again we find ourselves discussing the state of the nation’s supermarkets, with Sainsbury's (+3%) announcing record full-year profits, although bears will point to the 

slowing growth. Sainsbury’s, whilst still number three in the UK, has held the performance top-spot for some time. It was a good set of results for outgoing chief Justin King to leave on, but this does raise an interesting crossroads for investors. Supermarkets in general have been a tough place to be in the last few months. The rise of the discounters is mentioned constantly, and the consumer is more mobile than ever when it comes choice. King turned Sainsbury’s into a very healthy brand in his ten-year stint, positioned between the premium of Waitrose and the homeliness of Morrisons, whilst somewhat avoiding being seen as the behemoth, slow to react oil-tanker that many now see Tesco to be. That being said, Sainsbury’s has struggled to stay above £4 per share post the GFC, and has lost a lot of its merger and acquisition premium that had been in place since. At a quick glance you may be mistaken for thinking Morrisons was taking a hit from this news today, but 9p worth of shareholder pocket money accounts for most of the 5% fall this morning. 

HSBC watchers got a lie in when it comes to their results, as the Asia-focused bank didn't brief the market until the close of the Hong Kong markets. Once it did, it was a familiar banking theme of falling first-quarter profits and a tricky outlook. Having bounced around when the results came out, the stock has settled back to where it began the day, down around 1%. 

Sell was the retweet of the day yesterday as Twitter shares took a pounding, closing down nearly 18%. A lock up period for IPO holders expired yesterday, and with a massive short interest and borrowing in the stock harder to find by the day, it certainly wasn’t pretty. Tech focus turns to Alibaba today as the Chinese internet marketplace filed for its IPO, which is expected to be one of the biggest ever. Despite recent tech headaches, IG’s IPO grey market is still indicating a valuation close to $200 billion, a premium to recent media speculation. 

Currently we expect US markets open to bounce slightly from yesterday’s weak finish, with the Dow Jones called to open 20 points higher at 16,420.

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