Late market roundup: FTSE 100 outperforms peers amid tech sell-off

Stocks were mixed on Thursday, with the FTSE 100 rising, thanks to its relatively low technology stock exposure, as well as lower bond yields and pleasantly surprising UK growth data.

In London, the FTSE 100 index ended up 115.49 points, 1.1%, at 10,840.35. The FTSE 250 climbed 64.00 points, 0.3%, to 24,424.77, but the AIM all-share fell 2.82 points, 0.4%, to 765.09.

The Cboe UK 100 ended up 1.0% at 1,075.80, the Cboe UK 250 closed 0.6% higher at 21,422.00, and the Cboe small companies rose 0.3% to 18,809.57.

London's gains came as investors shifted away from technology stocks amid fears about the future of capex spending, Chinese competition and expected returns from artificial intelligence.

Kathleen Brooks, research director at XTB explained that the AI trade is experiencing a "major shake out", and the market is ignoring strong earnings beats as investors fret about strong inflation, amid an increase in Fed rate hike bets."

She added that when the "AI trade sells off, the UK is the harbour in the storm."

In European equity markets on Thursday, the CAC 40 in Paris ended up 0.8%, while the DAX 40 in Frankfurt added 0.3%.

In Frankfurt, semiconductor firm Infineon lost 4.8%, while Siemens Energy, which provides power solutions to data centres, shed 2.6%, both well above earlier lows.

In New York, markets were mixed. The Dow Jones Industrial Average was up 1.0% at the time of the closing bell in London on Tuesday. The S&P 500 edged up 0.1%, and the Nasdaq Composite faltered 0.4%.

On Wall Street, chip makers Nvidia, Advanced Micro Devices and Broadcom fell 2.2%, 4.4% and 1.9% respectively.

"Tech investors are getting uncomfortable with the amount of debt being used to fund the AI build-out," commented Dan Coatsworth, head of markets at AJ Bell.

"There is a growing fear that big names in the tech space are running too fast, and they're primed to trip up. Reports about Anthropic's third-quarter revenue suggest it isn't growing as fast as expected, which added to fears that the AI euphoria might be hard to sustain," he added.

The Financial Times reported that Anthropic has told investors that its third-quarter revenue rose nearly 50% to USD16.8 billion. Revenue increased from USD11.5 billion in the second quarter, although growth slowed sharply from the previous quarter, when revenue more than doubled from around USD4.8 billion.

More encouragingly for equities, bond yields eased despite the higher US inflation figures on Wednesday.

The yield on the US 10-year Treasury was quoted at 5.10% on Thursday, narrowed from 5.26% at the same time on Wednesday. The yield on the US 30-year Treasury was quoted at 5.42%, down from 5.57%.

David Morrison, analyst at Trade Nation, said it appears that comments from Federal Reserve members, Vice Chair for Supervision Michelle Bowman and San Francisco Fed President Mary Daly, calmed investors somewhat by persuading them that there was no need for the Fed's to rush to raise rates again this month, following September's increase.

The pound was quoted at USD1.3254, up from USD1.3152. Against the euro, sterling nudged up to EUR1.1828 from EUR1.1826.

The euro firmed to USD1.1204 from USD1.1121. Against the yen, the dollar was trading at JPY158.16, down from JPY158.86.

Back in the UK, figures showed that the economy proved more resilient than expected in August, posting surprise growth as a rebound in manufacturing offset weakness in services and construction.

August's minor growth, which defied forecasts of a decline, followed a more convincing stride made in July and means that UK GDP is on track to top a Bank of England forecast for the quarter ended September 30.

Gross domestic product rose 0.1% month-on-month in August, the Office for National Statistics said, beating expectations for a 0.1% decline. Growth slowed from 0.4% in July, while June's expansion was revised up to 0.4% from 0.3%.

Rob Wood at Pantheon Macroeconomics said: "We think GDP is on track to grow by a somewhat hard-to-believe 0.7% quarter-to-quarter in Q3, above the MPC's latest forecast of 0.4%, and far above its expectation from just a couple of months ago of 0.1%."

Wood said the main short-term risks remain another hit to growth from uncertainty surrounding the October budget and higher energy costs increasingly dragging on consumers.

"But a relatively early fiscal statement and a chancellor aiming for a 'beige' Budget mean we should see a smaller growth hit than last year," he added.

Credit checker Experian led the FTSE 100 risers, up 5.9%, with telecoms firm BT up 4.3%, and accountancy software provider Sage up 5.6%.

JD Sports Fashion climbed 4.3% as it hosted analysts in Orlando.

While there were no updates to financial guidance or targets, management focused the discussion on how they plan to drive growth and profitability in the US sporting goods market.

Computacenter, a beneficiary of strong data centre spending, led the fallers, down 5.6%. Technology-focused trusts Polar Capital Technology and Scottish Mortgage Investment Trust declined 4.7% and 1.2% respectively.

Antofagasta fell 4.1% as it reported lower third-quarter output and 2027 guidance than hoped.

The London-based miner focused on Chile sees copper production in 2027 between 630,000 and 690,000 tonnes compared to company-compiled consensus of 692,000 tonnes.

"Given the weaker than expected 2027 copper output guidance, we expect 2027 consensus Ebitda could fall by mid single digits," said JPMorgan analyst Patrick Jones.

The miner is also facing strike action from two unions at its Centinela mine.

On the FTSE 250, THG leapt 16% as it edged up 2026 earnings guidance and said that whey prices were easing, which should support margins in its Protein division.

Dunelm jumped 7.9% as it backed guidance and said sales had picked up after a slow start to the September quarter.

"Following a series of recent downgrades, today's reiteration of FY27 [pretax profit] expectations has brought relief," said Georgina Johanan, retail equity analyst at JPMorgan.

Also in the green, XPS Pensions rose 7.7% after saying it expects full-year results to come in slightly ahead of expectations, following strong revenue growth in the first half.

Heading lower, Weybridge-based packaging firm Mondi shed 8.1%.

It reported that input costs were higher than expected as energy-related costs continued to rise through the third quarter, along with anticipated increases in wood costs in Central and Eastern Europe.

Gold was quoted at USD4,152.39 an ounce, up from USD4,089.77.

Brent oil was quoted at USD106.33 a barrel, up from USD105.67.

The biggest risers on the FTSE 100 were Experian, up 159.00p at 2,855.00p, Sage Group, up 60.50p at 1,133.50p, Compass Group, up 1.38p at 32.72p, JD Sports Fashion, up 3.82p at 92.26p and BT Group,up 8.45p at 206.90p.

The biggest fallers on the FTSE 100 were Computacenter, down 305.00p at 5,160.00p, Polar Capital Technology Trust, down 31.50p at 646.50p, Antofagasta, down 146.00p at 3,426.00p, Weir, down 108.00p at 2,614.00p and Ithaca Energy, down 7.20p at 291.60p.

There are no significant events scheduled in Friday's local corporate calendar.

Friday's global economic calendar has housing starts data in Canada, eurozone inflation figures and a US industrial production report.

In the UK, Bank of England Governor Andrew Bailey is due to give a speech.

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