FTSE falls after Wall Street sell-off, as Arm leads technology stocks lower

Worries about global growth unsettle investors but cement deal lifts CRH

A sharp sell-off on Wall Street late last week has spilled over into Asian markets overnight and into early trading in Europe, despite a number of hefty takeover deals.

Technology shares in particular are in focus, after a slide on Nasdaq prompted fears that recent gains could presage a new bubble. So Arm is down 23p at 973p, Imagination Technologies has fallen 10.1p to 204.6p, CSR has lost 23.5p to 666.5p, Pace is 15.2p lower at 434.8p,Xaar is off 27p at 880p while recently floated JustEat has dropped 3.75p to 287p.

Rebecca O'Keeffe at Interactive Investor said:

Technology and biotech shares have been under pressure in recent weeks, but Friday's rout was the most pronounced sign yet that investors are becoming increasingly nervous the sector has been overbought. Asian markets have tracked the US market down and European equities have also followed suit, however the FTSE 100 has less of a bias towards technology than many global indices, which should limit its losses today.

Earnings season kicks off in the US tomorrow and investors will be hoping for robust gains in profitability in order to justify the market's elevated valuations. If company results disappoint, this could have a dramatic impact on investor sentiment and see the start of a sharp sell-off.

The FTSE 100 is currently down 35.65 points at 6659.90, not helped by the World Bank warning about a slowdown in Asian markets, with China's growth rate for 2014 trimmed from 7.7% to 7.6%.

This of course has put mining shares under a little pressure, given China is a major consumer of commodities. BHP Billiton is down 23.5p at 1937.5p while Anglo American is off 1.5p at 1563.5p.

News that India's Sun Pharmaceuticals has agreed to buy rival Ranbaxy for $3.2bn has not helped pharmaceuticals groups in the UK.GlaxoSmithKline is down 8.5p at 1568.5p while AstraZeneca has fallen 29p to £38.94. But Savvas Neophytou at Panmure Gordon saw positive signs for AstraZeneca from the proposed deal:

Ranbaxy's capitulation implies, in our view, that its manufacturing woes were deeper than had previously been expected. Given Ranbaxy's role in the impending genericisation of [AstraZeneca's] Nexium, we assume that there will now be a delay in launching generic Nexium in the US. Each month that goes by without generic competition should boost AstraZeneca's pretax profit by some 2.1%. We had recently upgraded our Nexium forecasts to take this into account but today's development could enable further upgrades. We re-iterate our hold recommendation.

The most important element of this new development, in our view, is the very last sentence of the press release which states "…Sun Pharma anticipates that the transaction will close by the end of calendar year 2014." Clearly with both these players otherwise occupied with closing a large and complicated transaction, perhaps their priorities will not be on Nexium which should benefit AstraZeneca in the short-term.

Among the risers, building materials group CRH has climbed 19p to £17.94 after Switzerland's Holcim's $44bn agreement to buy France's Lafarge.

Supermarkets, under pressure recently, have edged higher on reports that price discounting would not have a serious hit on their profits. Tescois up 1.9p at 289.3p while Morrisons is 1.5p higher at 206.3p.