The FTSE 100 jumped Friday as some of the pressures that weighed on investor sentiment this week eased, led by software and mining companies.
Brent oil prices edging back down towards $100 helped temper inflation fears that have driven trade this week. Despite several negative sessions, the FTSE 100 was on track to close the week higher. The index was at 10,523 at the time of writing.
“The Footsie is flying higher at the end of a volatile week, with a slight easing in oil prices offering some respite. The blue-chip index has shrugged off a sell-off on Wall Street and a mixed performance in Asia to climb higher,” said Susannah Streeter, Chief Investment Strategist at Wealth Club.
Oil prices will likely drive equities performance in the near term, as market participants try to plot interest rates for the rest of the year.
US stocks closed sharply lower overnight amid questions around the AI trade after OpenAI’s annualised revenues were reported to be $20bn lower than previously estimated.
But almost all FTSE 100 stocks were trading higher at the time of writing, with just five firms in the red.
Digital and software stocks that have borne the brunt of fears about AI disruption were Friday’s best performers. Sage Group topped the leaderboard after jumping 4.8% as RELX surged 4.6%. Experian was also among the gainers.
Nick Train, manager of the Finsbury Growth & Income Trust, argued at a recent UK Investor Magazine Investor Conference that these stocks were performing strongly despite disruption fears, and today’s rally suggests this year’s selling may be overdone.
Telecoms stocks BT, Airtel and Vodafone were the FTSE 100’s biggest detractors after SpaceX made a move into the market that could introduce a competitor that is well equipped to steal market shares and offer services they jusyt don’t have in their arsenal.
“Investors hung up on telecoms stocks after a SpaceX spectrum deal sent an electric shock down the line. SpaceX is to buy a nationwide spectrum portfolio in the US which would give its Starlink business greater capabilities in the US telecoms market,” said Russ Mould, investment director at AJ Bell.
“Shares in AT&T, Verizon and T-Mobile fell on the news that Starlink is to become more of a mainstream player. Naturally, the same sentiment was felt on the other side of the pond as it gave European telecoms operators a reason to view Elon Musk’s outfit as a more serious longer-term competitive threat.”
Airtel Africa was the FTSE 100’s top faller, down 5.5%, while Vodafone fell 3.9%.