Carla Mozee/MarketWatch
U.K. stocks declined Wednesday, tracking a fall in U.S. equities in the previous session, in which technology names took a hammering.
But a surge in shares of Shire PLC on deal buzz, as well as gains in Burberry Group PLC and other consumer-related names after ratings upgrades helped guide the London benchmark off session lows.
How markets are moving
The FTSE 100 index UKX, -0.09% dropped 0.3% to 6,978.36. That fall follows Tuesday’s jump of 1.6% , which put an end to a four-session losing streak. The London blue-chip benchmark has lost more than 9% this year.
See: Brace for more ‘poor’ action by U.K. stocks, says world’s largest asset manager
The pound GBPUSD, -0.0071% bought $1.4154, little changed from $1.4159 late Tuesday in New York.
What’s driving markets
On investors’ minds was the rout in tech stocks that led a sharp downturn on Wall Street on Tuesday. The Nasdaq Composite Index COMP, -2.93% ended down 2.9%, with shares of Twitter Inc. TWTR, -12.03% sinking 12% on worries about its data business. Facebook Inc. FB, -4.90% , still embroiled in a customer data scandal, lost nearly 5%.
The sector, which has been at the forefront of Wall Street’s run higher this year, was also hurt by news that the U.S. is considering a ban on Chinese investment in certain sensitive technologies.
By contrast, reports that the U.S. and China are conducting behind-the-scenes trade talks helped drive a surge in London-listed blue chips on Tuesday, as concerns about a global trade war abated.
Opinion: Who gets hurt in a trade war? Mostly not China
Elsewhere, oil stocks were falling alongside a drop in crude prices CLK8, -0.64% LCOK8, -0.21% , after data from the American Petroleum Institute showed a sharp rise in weekly U.S. crude supplies.
What strategists are saying
“Markets remain volatile, as another sharp swing lower on Wall Street tech stocks is driving equities lower and rippling through the asset classes,” said Richard Perry, market analyst at Hantech Markets.
He noted that the U.S. 10-year Treasury yield TMUBMUSD10Y, -0.33% pulled below a key near-term floor at 2.79%.
“All this noise can be distracting for traders, but the medium-term corrective trends on equities and longer-term bear move on the dollar continue. Market fears over a trade war are still present, and whilst this is the case, there will be a negative bias in markets,” Perry said in a note.
Stock movers
Shire PLC SHP, +17.56% SHPG, +0.26% rallied as much as 26% after Japanese biopharma Takeda Pharmaceutical Corp. 4502, -0.32% said it’s considering making an offer for its rival.
Oil producers BP PLC BP., -1.18% BP, -1.11% and Royal Dutch Shell PLC RDSB, -1.17% RDS.B, -0.24% each lost 1.5% as oil prices declined.
Among techs, shares of software maker Sage Group PLC SGE, -0.40% shed 0.9%, but business software maker Micro Focus International PLC MCRO, +1.28% turned higher to trade up 0.8%.
Unilever PLC ULVR, +2.31% tacked on 2.4% after UBS upgraded the consumer products heavyweight to buy from neutral.
Burberry Group PLC BRBY, +1.32% gained 1.1% after Goldman Sachs raised its rating on the luxury goods maker to buy from neutral.
Associated British Foods PLC ABF, +1.98% , whose operations include fast-fashion retailer Primark, was up 1.8% after Morgan Stanley lifted its rating to equal weight from overweight.
Paddy Power Betfair PLC PPB, -0.69% lost 1% as the betting company said Jonathan Hill, the current chief financial officer at Saga PLC SAGA, -1.85% , will be appointed as its new CFO.
BT Group PLC BT.A, +0.63% turned higher, edging up 0.1%. The shares were lower earlier after Ofcom, the U.K.’s telecommunications regulator, confirmed new rules aimed at boosting investment in full-fiber broadband networks. But it set a higher cap than previously outlined on the amount that BT charges to rivals to use its fast broadband service.
Data docket
Oil supply data is due at 10:30 a.m. Eastern Time from the U.S. Energy Information Administration. Analysts polled by S&P Global Platts forecast a rise in stockpiles of 1 million barrels.