The FTSE 100 was firmly higher on Thursday as investors digested blowout earnings from Micron Technology, which went a long way toward dispelling any concerns about the AI trade.
Although London lacks major AI stocks, the boost in global sentiment helped the FTSE 100 rise 0.3%.
“Once more faith has been restored in the AI boom, after another bout of jitters this week,” said Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
“Micron and Qualcomm have come riding to the rescue, stressing that supply of chips was still not keeping up with demand, and wouldn’t for some time. The risk for Micron was skewed to the downside after its blistering rally over the last year, but the strong outlook did the trick, causing the shares to surge and dragging Nasdaq futures higher, which duly lit the fire under a rally for the Nikkei and everyone’s favourite bubble index, the Kospi.”
Micron shares were 16% higher in the premarket, and a plethora of AI-related companies followed suit.
In London, 3i was the FTSE 100’s top gainer after investors received a very welcome positive update on its key holding after a period of uncertainty.
“FTSE 100 investment trust 3i Group jumped 10% after saying that its main holding is doing well,” said Russ Mould, investment director at AJ Bell.
“3i is a play on Dutch company Action and news flow from this discount retailer had recently disappointed. 3i now says Action is expected to deliver strong profit growth this quarter, helping to win back the market’s favour.”
Abderdeen was also among the best performers, rising 4% on the back of strong flows for interactive investor. Abderdeen acquired the platform in 2022.
Barratt Redrow was 4% higher after an investor encouraged the housebuilder to use its cash pile to buy back shares at the bargain-basement price at which its shares currently trade.
“Value investor Phoenix has called for housebuilder Barratt Redrow to spend more cash on share buybacks, calling it ‘an exceptional opportunity’ on the current valuation. Investors have latched onto the news and bid up the shares in hope the housebuilder will respond positively,” Russ Mould said.
Persimmon rose 3% in sympathy.
London Stock Exchange Group was down 2% at the time of writing and was the FTSE 100’s top decliner.