Key facts
- Global tech stocks experienced a widespread sell-off.
- SpaceX shares plunged 16% to $154 after announcing a major bond issue to fund AI plans.
- South Korea's Kospi index fell 8.3%, leading to a trading halt.
- The FTSE 100 was down 0.4%, with miners leading the decline.
- Scottish Mortgage Investment Trust and Baillie Gifford's US Growth Trust saw share price drops due to their SpaceX holdings.
Global technology stocks experienced a significant downturn, with SpaceX shares leading the decline after announcing a substantial bond issuance aimed at funding its artificial intelligence initiatives. The rocket maker's stock plunged 16% to $154, a sharp reversal from its recent peak of $201 just a week prior, following a strong IPO performance.
This sell-off triggered a broader market rout across Asia and Europe. South Korea's Kospi index plummeted 8.3%, prompting the stock exchange to halt trading as investors divested from chip-related stocks. Wall Street also saw billions wiped from tech valuations, with analysts pointing to SpaceX's performance as a key catalyst.
Investment trusts with significant stakes in SpaceX also felt the impact. Scottish Mortgage Investment Trust saw its shares fall 4% to 1,381.62p, as its holding in the rocket maker constitutes about a fifth of its £16 billion fund. Similarly, Baillie Gifford's US Growth Trust was down 3% to 321.78, with SpaceX making up approximately 15% of its portfolio.
The FTSE 100 in London traded down 0.4% by midday, influenced by a broader global retreat in equities and a notable fall in mining stocks, including Antofagasta, Anglo American, and Fresnillo. Continental European markets also registered losses, with the CAC 40 in Paris down 0.7%, Germany's DAX down 1.1%, and Amsterdam's AEX down 1.4%.
Despite the broader market weakness, London's tech sector showed some resilience, partly due to the addition of companies like Computacenter. Sage, a major UK tech firm, saw its shares rise 1.5% to 814.40, providing some support to the sector.