UK tech stocks back in vogue

Valuations hit two-year high in Q4, according to Grant Thornton

Technology Index stock valuations soared 94 per cent last year

UK technology stock prices almost doubled last year as the IT sector swang back into vogue with investors.

The value of the 142 shares in analyst Grant Thornton’s Technology Index soared 94 per cent last year, significantly outperforming the overall market.

Niki Dixon, head of technology at Grant Thornton, said tech stock are recovering well after the downturn and are an “attractive prospect” for investors, due to their capacity to generate considerable capital growth over a short period of time.

They are also recovering more quickly than after the dot.com bubble burst, she added, when many of the key technologies were relatively untried.

“We are now in a period where both telecoms, through the rapid adoption of mobile broadband and smartphone technologies, and computer services through the adoption of cloud computing and other service based solutions, have a much stronger foothold in the market and will secure significant revenue growth as the wider economy comes out of the recession,” she said.

UK tech stocks hit their highest level since the fourth quarter of 2007, according to Grant Thornton.