Dropbox a bright spot on negative week for Silicon Valley
Markets report: Fears continue to mount over a global trade war on the back of US imposed tariffs
Dropbox co-founders Drew Houston and Arash Ferdowsi embrace after ringing the opening bell on the Nasdaq Stock Market as Dropbox is listed for the company’s initial public offering. Photograph: Lucas Jackson/Reuters
After a relatively difficult week for Silicon Valley as investor sentiment turned sour against companies like Facebook, one bright light came in the form of Dropbox, which went public on Friday. The company jumped as much as 48 per cent after it debuted on the Nasdaq on a day when fears continued to mount over a global trade war after the US imposed tariffs on imports from China.
US actions did little good for British shares which, early in the day, plummeted to a 15-month low before recovering later on.
The Iseq index managed to escape the effects of US tariff talk and was almost unchanged on the day.
The Iseq overall index was largely flat on the day, ending up just 0.01 per cent amid a strong performance from some of the financial names on the index.
Permanent TSB, one of the more unloved banks on the index of late closed up by 4.74 per cent to €1.99 on higher volume than usual while insurer FBD edged up 2.03 per cent to €12.55 albeit on very low volume.
On the other end of the index on the last trading day of the week were the real estate investment trusts. Ires, Hibernia and Green Reit all closed the day lower by 0.43, 0.55 and 1.57 per cent respectively.
Europe’s second largest airline by passenger numbers, Ryanair, edged down 1.08 per cent to €16.02 slightly underperforming the European airline sector. Budget rival Easyjet, however, also dropped in the UK by 0.13 per cent.
The FTSE 100 ended the session 0.4 per cent lower clawing back some losses after hitting its lowest level since December 2016 in early trading.
Investor unease extended to the response from China, which urged the United States to “pull back from the brink”, and unveiled its own plans to impose tariffs on up to $3 billion of US imports.
Indivior shares plummeted more than 20 per cent at the open before recovering, ending down 6.3 per cent, after the pharma firm lost a patent protection case, setting it up for cheap competition to its opioid addiction treatment.
Smiths Group dropped 4.4 per cent to the bottom of the FTSE 100 after reporting a weaker first-half profit than expected. The engineering group pointed to currency headwinds and higher R&D costs.
Most European sectors were trading in negative territory, sending the pan-regional STOXX 600 benchmark index falling for a third day, down 0.9 per cent to its lowest level since February 2017.
Euro zone indexes including the export-sensitive DAX also fell 1.8 per cent but remained above early March lows.
Among the few gainers on Friday were shares in precious metals miners Fresnillo, Randgold and Polymetal , all up between 0.8 and 4.2 per cent, as the gold price rose on the back of growing demand for safe haven assets.
Among companies exposed to US steel and aluminium tariffs, shares in carmakers Fiat Chrysler and BMW fell 2 and 1.4 per cent respectively, while steel tube maker Tenaris dropped 4.1 per cent and ThyssenKrupp declined 3 per cent.
The Dow Jones Industrial Average was modestly higher, helped by Nike and as industrial stocks gained after a bruising day on Thursday when the United States moved to impose tariffs on up to $60 billion of Chinese imports, sparking fears of a trade war.
Nike shares rose 3.2 per cent after the company said it expected North America business to return to growth in the latter half of the year.
The industrial index was up 0.36 per cent, led by a 2.5 per cent gain for Boeing. Micron Technology fell about 5 per cent after Citigroup downgraded the chipmaker, citing falling NAND prices.
Dropbox surged as much as 48 per cent in their market debut on Friday as investors rushed to buy into the biggest tech IPO in more than a year.
– Additional reporting, Reuters