London stocks are set to open lower on Tuesday, giving back some of Monday’s gains as a sharp sell-off in technology shares weighed on sentiment despite continued hopes of easing tensions between the US and Iran.
Futures indicate the FTSE 100 will open around 30 points lower, or 0.3%, at 10,750.15, after the index gained 0.4% to close at 10,781.75 on Monday.
Wall Street ended mixed overnight. The Dow Jones Industrial Average rose 0.5%, the S&P 500 finished little changed, while the Nasdaq Composite fell 0.2% after reversing early gains.
Technology stocks came under pressure following reports that China has made significant progress in developing domestic semiconductor manufacturing equipment, raising fresh concerns over the competitive outlook for the sector. Nvidia fell 5.0%, while AMD declined 5.2%.
The weakness spread into Asia, with Japan’s Nikkei 225 falling 4.1% and South Korea’s Kospi tumbling 11% as Samsung Electronics and SK Hynix each dropped 13%. Hong Kong’s Hang Seng slipped 0.2%, while China’s Shanghai Composite fell 1.3%. Australia’s S&P/ASX 200 bucked the trend, rising 0.5%.
Oil prices continued to retreat as optimism grew over a potential diplomatic breakthrough between the US and Iran. Brent crude fell further to US$87.83 a barrel, extending Monday’s decline and remaining comfortably below US$90.
US President Donald Trump expressed confidence that negotiations with Iran could lead to a lasting peace agreement after both sides maintained a ceasefire for a third consecutive day.
Gold also weakened, falling to US$4,040.31 an ounce.
Currency markets were relatively subdued, with sterling easing to US$1.3289, while the yield on the benchmark US 10-year Treasury slipped to 4.63%.
On the UK corporate calendar, Barclays, GSK and Unilever are due to report half-year results.
