Black Monday (2)

Even though UK and European markets had closed before the unexpected rejection of the US financial markets bail-out plan it, it was a pretty horrible day. The FTSE100 closed 5.3% down, though UK tech stocks did a tad better, with the Techmark100 down 4.7% and the FTSE software and services index down 5.1%. Of course, the news hit US tech stocks hard, with Nasdaq down 9% to Dow Jones’ 7%. Banking-related tech stocks felt more pain (e.g. Metavante down 14%) though the broader-based tech stocks like HP (-7%), IBM (-4%), Accenture (-4%) and CSC (-6%) did relatively better. Sun suffered worse (-12%), as did the Indian ADRs, with Infosys and Wipro down 13%, Cognizant (actually, not an ADR but US-listed) down 15% and Satyam – which really has taken a hammering these past few weeks – down over 17%. Oddly, this run on the Indian SIs has not been repeated on anywhere near the same scale on the Mumbai exchange this morning (4.5 hours ahead of the UK), with most of the Indian majors down 1-2% on local trading, though they seemed to have presciently anticipated the US decision with bigger falls yesterday. This will undoubtedly change the tone of management comments on a couple of UK reports due very shortly – notably Misys’ trading update and Harvey Nash’s interims. More soon.