The FTSE 100 (FTSEINDICES: ^FTSE) is 1.25%, or 83 points, lower at the time of writing after a rapid sell-off in US and Asian markets last night.
ARM Holdings (LSE: ARM) and Sage Group were among the worst performers, falling 5% and 2% respectively, after the US technology index the NASDAQ suffered its worst day in three years, slumping 3%.
Shares in ARM have rocketed 600% in the last decade, and its microprocessor designs are featured in 99% of the world’s smartphones and tablets. Sage develops software products for small and medium sized companies.
Tech stocks have been trading at sky-high valuations for some time now. ARM, for instance, trades on a P/E of 38. Handsomely valued, but not as stratospheric as newly listed online businesses like AO World (a trailing P/E above 200) and Just Eat (a trailing P/E above 250).
These companies look ridiculously expensive, and their valuations assume barely a bump along the road — that their success is, in a word, inevitable. That might not be the case.
Morrisons, meanwhile, is among the few leading shares trading up, adding 2p to 200p.
To date in 2014 the FTSE 100 is down 2.5%, or 184 points, compared with a 639 point gain at this time last year. It’s likely that the tech sell-off in the last 24 hours could continue.
