The FTSE 100 struggled for direction on Wednesday as the index missed out on a recovery in Asian and US technology after SpaceX reported upbeat earnings.
London’s leading index was down by 5 points at the time of writing.
“The FTSE 100 was a laggard on Wednesday morning despite a recovery in Asian markets and tentative gains elsewhere in Europe,” explained AJ Bell investment director Russ Mould.
“The fortunes of the index were not helped by a higher-than-anticipated inflation number which could up the pressure on the Bank of England to increase rates at its next meeting. Retailers and housebuilders were among those to come under pressure.
“US futures point to a positive start on Wall Street after strong numbers from SpaceX. The next test of market sentiment will come tonight with earnings from Meta and Tesla.”
Upbeat earnings from SpaceX and signs of buoyancy couldn’t have come at a better time for global equity markets gripped by fears about the AI rollout.
“SpaceX’s third quarter showed that this is now an AI business with a rocket company attached,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Revenue more than doubled to $14.6bn and profits came in well ahead of what the market expected. Starlink kept growing steadily, and Starship’s first paying mission was a genuine milestone. But the real story was Super Intelligence. Selling compute at today’s prices has turned what was a loss-making division a year ago into the group’s biggest cash engine, almost overnight.”
SpaceX shares were up 8% in US premarket trading at the time of writing.
Improving sentiment around AI filtered through into London’s market via Computacenter, which has become the FTSE 100’s go-to AI play. Computacenter shares were up 2.7% at the time of writing.
But this wasn’t enough to spark a wider FTSE 100 rally, with fears about oil prices keeping a cap on gains at the index level.
Consumer-facing stocks were down in dumps amid nagging concerns about higher interest rates. Kingfisher was notably lower by 2.7%. Miners were
3i was one of the FTSE 100’s worst performers as investors reacted to the riots in France, where the investment trust’s largest holding, the retailer Action, operates.