Thursday started in euphoric moods on indices but ended with a panic sell-off, triggered by US tech stocks. While there was no obvious single reason, it all started with Tesla. The company first announced share sale and then we learned that a major shareholder reduced his stake – a sign that valuation could be simply too high.
Valuation concerns are present for the whole tech sector and little wonder US100 was the biggest sell-off victim among indices. What’s next? The index is still very high and within a very steep upwards channel. A lower limit of this channel runs around 11450 points while a previous local high is around 11265 – these are support level to watch.
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However, when the index made an attempt to break higher from a similar channel in February it eventually ended in a massive sell-off. This situation looks similar but obviously back in February pandemic was the main reason.
Traders will receive one more crucial piece of information today – the NFP report from the US (1:30pm BST). We will comment the release in the “News” section for you.
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