The FTSE 100 moved lower on Thursday as fears over AI chip stocks and Middle East tensions gave investors reason to be cautious.
London’s leading index was trading down 0.3% at the time of writing, but remained in a sideways trading pattern.
“The FTSE 100 took its cue from weak trading in Asia and fell back amid a lower open for most other European markets,” says AJ Bell head of markets Dan Coatsworth.
“Brent crude oil prices remain near one-month highs as tensions continue to mount in the Middle East.
“Fragile sentiment is leading to a continued pullback in memory chip stocks after their gravity-defying run as investors fret about elevated valuations.”
Barring a few sessions towards the end of June, the FTSE 100 has remained in a tight range around 10,500 and has shown little willingness to break out in either direction amid subdued sentiment.
The index is largely immune to worries about chips and can provide a haven when other indices fall, resulting in fairly tepid trading on an index level over the last month.
FTSE 100 movers
Experian was among the FTSE 100’s top fallers after the data and credit rating agency released a trading statement, maintaining its outlook for the year.
On the face of it, performance wasn’t bad. Revenues grew 10% on an actual-currency basis, but investors may be concerned about weakness in the North American market, where the company is most exposed to AI disruption and competitors’ innovations.
Declines in Experian translated into concerns about other AI-exposed stocks, such as RELX, which fell 2% on Thursday.
These stocks are in a strange situation because they clearly outline the benefits of AI for their businesses, only for the market to pick up on the slightest sign of weakness and price in a doomsday scenario.
St James’s Place dropped back again and was trading at levels similar to those when it announced it was losing a big partner last week.
Diploma was the FTSE 100’s top riser after declaring ‘very strong Q3 performance’. Shares rose 3.6% as the group reported 15% organic growth and upgraded full-year organic growth to 14% from 12%.
Diploma shares have had an astounding run since the March lows, adding around 40%. This is one business that certainly isn’t being impacted by AI.