The FTSE 100 fell on Thursday, missing out on a boost from Nvidia earnings, which sparked a rally in US futures after the chip giant smashed estimates.
Nvidia shares were a whopping 7% higher in the US premarket, helping lift most of the US tech sector.
London’s leading index side-stepped most of the concern around AI in recent months, so one shouldn’t expect it to join in a rally on a wave of optimism that the sector is in good health.
Nonetheless, a circa 0.5% drop in the FTSE 100 will be disappointing given the index looked set to challenge all-time highs in recent sessions.
“Euphoria around Nvidia’s latest results failed to spread across the rest of the market as European equities were in the red on Thursday,” says Dan Coatsworth, head of markets at AJ Bell.
“The FTSE 100 dipped 0.5% to 10,819 with technology the only sector in positive territory. Nvidia’s resounding optimism gave a boost to UK tech-related stocks including Computacenter, Polar Capital Technology Trust and Scottish Mortgage Investment Trust as it implied the AI-related trend still has further to run.
“It wasn’t enough to lift the FTSE 100 out of the doldrums, with oil producers and miners acting as the biggest drag on the index.”
Glencore lost 1.5%, and Rio Tinto gave up 1.2%. BP was 0.8% lower.
Ex-dividends played a part in the FTSE 100’s decline on Thursday, with Croda, LondonMetric and Games Workshop all among the biggest fallers.
The weight of ex-dividend and softer-commodity companies offset strength in the few FTSE 100 stocks with exposure to AI.
Polar Capital Technology Trust includes Nvidia in its top holdings and rallied 2% on the back of the chip giant’s results.
Computacenter, one of the UK’s leading AI stocks due to its adoption of the technology in its offering, was the FTSE 100’s top riser, jumping 4% on Thursday.
Other AI-related stocks RELX and LSEG were also among the best performers.