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FTSE 100 set to open lower after Wall Street retreat

Published: 15:55 11 Apr 2014 AEST

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Britain’s blue chip share index is on track to open around 50 points lower after Wall Street’s rout that saw the Nasdaq register its worst day since November 2011.

The tech-heavy exchange dropped 3% after another sharp sell-off in technology and biotech shares, including online travel site TripAdvisor, down 7%.

Fears have re-emerged about the valuations of some tech companies following some IPO spikes recently.

Twitter, for example, which surged more than 70% on debut. Shares in the micro-blogging firm however, which is yet to be profitable, has almost halved since December.

CMC Markets’ Michael Hewson says profits are becoming increasingly important to investors.

“Finally it appears that markets are looking past the froth of unrealistic valuations and starting to adopt a “show me the money” approach, and this is likely to be reflected in a sharply lower open this morning in Europe,” he argued.

The Footsie, which closed marginally higher on Thursday at 6,642, is expected to start the day around 50 points lower.

It was also a bad day for the S&P 500, down more than 2%, and the Dow Jones, down 1.6%.

The declines also dragged Asian stocks down, with Japanese shares at six-month lows.


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