Market snapshot: records in US, but UK stocks tumble

Big tech shares continue their relentless growth amid fears of faltering growth in the world’s largest economy. Read the latest from our head of markets.

Relatively unaffected by the vagaries of the return to normality due to the Delta variant, consumers continue to use technology regardless. As such, big tech stocks are edging towards becoming the “new defensives”, as uncertainty abounds elsewhere. In addition, investors switched once more from value to growth, propelling the Nasdaq to a fresh record closing high, and ahead by 19.3% in the year to date.

Within the big tech space, Apple Inc (NASDAQ:AAPL) shares added 1.6%, also hitting a record high. Ahead of a special event next week when new versions of the iPhone are expected to be unveiled, heightened expectations lifted the shares, where the market capitalisation is now in excess of $2.5 trillion.

Elsewhere, fears of slowing growth trimmed recent gains on the other major indices, with expectations being revised to incorporate the effect that the Delta variant may be having on the performance of corporates in the current third quarter. Even so, the pause for reflection does not detract from strong performances in the year to date, with the Dow Jones up by 14.7% and the S&P500 by 20.3%.

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The wider cyclical concerns and a mixed showing from Asian markets filtered through to a weak opening in the UK, where investors have been more circumspect over recent trading sessions.

Where the initial surge of economic growth had been positive for the market, demand soon outstripped supply, causing blockages in the supply chain and some labour shortages which have hampered subsequent progress.

Cyclical shares such as the banks bore the brunt of early selling pressure, although there was an element of positive pushback from the mining stocks in the opening exchanges. 

The main indices are still seen as attractive on valuation grounds, and as such could provide buying opportunities on the dips to interested parties, which has been the case this year as international investors have hovered over the UK market.

The initial weakness in the main UK indices trims the gains made in the year to date, although the FTSE100 remains comfortably ahead by 9.8% and the FTSE250 by 16.9%.