The FTSE 100 was higher on Friday after a choppy week for global stocks amid volatility in precious metals and concerns about the future of software companies.
London’s leading index was 0.1% higher at 10,328 at the time of writing.
Banks and miners were among the risers, while there was a divergence in the performance of heavily hit FTSE 100 software stocks.
The London Stock Exchange Group managed to attract buyers on Friday, gaining 1%, but RELX, Experian, and Sage resumed their declines. RELX was down 3% at the time of writing.
“It’s been a week from hell for tech stocks as AI spending plans caused upset across global markets and pushed investors to unplug hyperscalers from their portfolios,” says Russ Mould, investment director at AJ Bell.
Mould continued to highlight that AI considerations were also impacting the US tech giants, with Amazon shares sinking on the sheer scale of their AI capex.
“Amazon has followed its peers by turning up the dial to max on AI spending, leaving investors with their jaws to the floor. The hyperscalers are so confident that AI will change the world, they’re spending big bucks to have the foundations to serve what they predict will be sky-high demand. Investors are becoming increasingly dubious about the level of spending, fearing these companies are wasting their money,” Mould said.
US futures, however, were pointing to a higher open despite Amazon losing 8% as investors rotated into stocks that would benefit from Mag 7 AI spending, such as chipmakers and AI factories.
Fresnillo was the FTSE 100’s best performer as gold price choppiness continued, but within a tighter range than earlier in the week.
Joseph Dahrieh, Managing Director at Tickmill, explained, “Gold prices remained volatile, but traded broadly near the same levels seen during the last few trading sessions.”
“The market could stabilize gradually after its last selloff, but could continue to react to new data and geopolitical developments. The latter could fuel demand for safe-haven assets.”
Melten Energy was at the bottom of the leaderboard after warning that EBITDA would be 25% lower this year due to challenges at its renewable energy business. Melten shares were 15% lower at the time of writing.