Highlights
- FTSE 100 opens 72 points higher at 10,797
- Wall Street heads lower
- UK GDP print beats expectations
- Miners dragged lower by Antofagasta
FTSE 100 holds firm as Wall Street wrestles with inflation and tech rout
London's blue-chip index was up 72 points in mid-afternoon trading on Thursday, shrugging off a mixed start on Wall Street where fresh inflation data and a deepening semiconductor sell-off continued to weigh on sentiment.
US stocks opened divided, with the Dow Jones Industrial Average rising 0.6% while the S&P 500 slipped 0.4% and the Nasdaq Composite fell more than 1%.
A hotter-than-expected inflation reading stoked fears of further Federal Reserve interest rate rises.
Wholesale price inflation in the US rose at its fastest pace since 2022 in September, adding to pressure on the Fed to tighten policy further even as markets had hoped for a pause.
Semiconductor stocks remained under heavy selling pressure, with Taiwan Semiconductor Manufacturing Company falling 4% despite posting record profits and beating forecasts, as the global chip rout triggered by South Korea's near-9% KOSPI plunge overnight showed no sign of abating.
AI infrastructure stocks were also hit, with CoreWeave falling sharply on renewed concerns about its debt-heavy balance sheet and whether rising interest costs can be covered by the speed of its expansion.
The broader worry gripping markets is whether the enormous capital being deployed on AI infrastructure will generate sufficient returns to justify the borrowing used to fund it, a question increasingly difficult for investors to dismiss.
The FTSE 100's resilience reflected its limited direct exposure to US technology stocks and relief that domestic GDP figures, published earlier in the day, continued to surprise to the upside.
FTSE 100 pushes higher as markets shrug off tech rout and AI jitters
London's blue-chip index extended its gains on Thursday, rising 50 points despite a deepening global technology sell-off and fresh concerns about the pace of growth in artificial intelligence.
"Tech investors are getting uncomfortable with the amount of debt being used to fund the AI build-out," said Dan Coatsworth, head of markets at AJ Bell, pointing to reports that Anthropic's third-quarter revenue missed expectations as a sign that AI euphoria may be difficult to sustain.
Copper prices fell 1.6%, triggering a sell-off in base metal producers including Antofagasta and Anglo American, both of which had been seen as beneficiaries of AI-driven infrastructure spending.
The gambling sector was also in focus, with Entain and Rank both using trading updates to warn the government against further tax rises ahead of the Budget in a fortnight.
Dunelm steadied after a mixed trading update, with the market choosing to focus on improving momentum towards the end of the quarter rather than the overall slowdown in like-for-like sales.
Travis Perkins remained under pressure as subdued construction activity continued to weigh on volumes, leaving new chief executive Gavin Slark with limited room to manoeuvre in his first year in the role.
FTSE 100 shrugs off Asia rout and mining slide to push higher
London's blue-chip index defied a grim backdrop on Thursday, rising 39 points despite heavy selling in the mining sector and overnight carnage across Asian markets.
Antofagasta fell 6% after a disappointing production update, dragging Rio Tinto and Anglo American down around 4% each as investors sold out of copper-heavy miners.
The weakness in the sector was enough to weigh on sentiment but not derail the broader market, which had opened cautiously following a near-9% plunge in South Korea's KOSPI overnight and a 5% fall in Japan's Nikkei 225.
Strength elsewhere in the index was sufficient to absorb the mining losses, with the FTSE 100 outperforming its continental peers and bucking the broadly risk-off mood that has gripped global markets.
GDP boost
The FTSE 100 defied expectations of a lower start to post a 17-point gain in early trading. The morning's big surprise came from official macro data, which showed the UK grew unexpectedly in August, albeit by a comparatively modest 0.1%. Forecasts ahead of the update suggested economic contraction.
Deutsche Bank's chief economist, Sanjay Raja, said: "Undoubtedly, there may be some hiccups to come in the run-up to year-end, especially as energy prices continue to bite household incomes, and higher rates continue to drag on spending and investment.
"The good news? The UK’s resilience story continues. It’s hard to overstate how strong the UK's performance has been all year."
Asian impact limited
London's blue-chip index looks set to open modestly lower on Thursday, with spread bettors calling the FTSE 100 down around 14 points at the start of trade.
The relatively contained move stands in sharp contrast to the carnage seen across Asian markets overnight, where South Korea's KOSPI plunged nearly 9% and triggered a circuit breaker, its tenth of the year.
Japan's Nikkei 225 sank 5%, while Hong Kong's Hang Seng fell 1.3% and China's CSI 300 dropped 1.5%, as a deepening rout in technology stocks spread across the region.
The selloff was driven by concerns over Chinese semiconductor competition and hotter-than-expected US inflation, which raised the prospect of further Federal Reserve interest rate rises.
South Korean chipmakers bore the brunt, with SK Hynix falling more than 11% and Samsung Electronics down nearly 11%.
US markets also weakened, with the Nasdaq Composite falling 1.9% overnight.
