London pre-open: Stocks seen lower after tech-led US selloff
London stocks were set to drop at the open on Wednesday, taking their cue from a late selloff on Wall Street led by the technology sector.
The FTSE 100 was called to open down 50 points at 6,949 after stocks in the US suffered heavy losses, with Facebook under the cosh as it emerged that chief executive Mark Zuckerberg would testify before Congress following the Cambridge Analytica scandal.
Michael Hewson, chief market analyst CMC Markets, said: "With the increasing focus on what is going with respect to how Facebook has managed its users personal data, it must surely be only a matter of time before attention turns to the rest of the tech sector, and how companies like Alphabet, Twitter, Microsoft and Apple to name a few, manage their own users personal data. If lawmakers do turn their attention to the rest of the sector, which seems likely, then it is hard not to see how other tech companies will escape scrutiny on how they use this user data, raising the prospect that we could uncover other practices that invite scrutiny.
"Third party data access is likely to be one area of interest along with what safeguards they have in place with respect to this data, which to all intents and purposes is people’s intellectual property. If further malfeasance is uncovered then the out performance in tech stocks that has been so indicative of the recent run up could well be factor on any run lower, if investors lose confidence any further."
On the data front, the CBI distributive traders survey is at 1100 BST.
In corporate news, Paddy Power Betfair has recruited Jonathan Hill from Saga to be the bookmaker’s next chief financial officer. Hill, who will stay at the over-50s company until September, has been Saga’s CFO since 2015.
Following its announcement on Tuesday, in conjunction with its proposed return of capital by way of a B share scheme, Great Portland Estates confirmed that the redemption of the B shares issued under the scheme would occur on Wednesday.
The FTSE 250 company said it expected that shareholders entitled to receive payments in respect of the proceeds from the redemption of the B shares would receive such payment by 13 April.
Diploma, the life sciences, seals and controls supplier, reported "robust" trading in the first half of the year, through sales growth has slowed slightly in the second quarter. Revenues in the six months to 31 March were up 8% on the prior year, the group said, which was down from the 10% growth produced in the first quarter.