FTSE 100 creeps closer to record high as investors dodge AI turmoil
The FTSE 100 is creeping toward another record high after logging its best run in three months, as investors hunt for stocks detached from AI and tech.
London’s blue chip index has recorded five straight days of gains and ticked up 0.18 per cent on Tuesday to trade at 10,875 by 11:45am.
If it continues its run this week the index could surpass its highest-ever intraday peak of 10,989 points on the last trading day of July.
Analysts pinned the rise on its minimal exposure to tech and AI stocks, which have been wavering ahead of a trading update from Nvidia on Wednesday.
“The FTSE’s relatively low exposure to the tech sector is also helping it avoid some of the turbulence rippling through global tech shares, giving investors a different mix of sectors to rely on,” said Susannah Streeter, chief investment strategist at Wealth Club.
Miners shine on US woes
Heavyweight miners have also helped the index rise higher, as investors returned to precious metals amid a weaker US currency and concerns surrounding debt and inflation.
Richard Hunter, head of markets at Interactive Investor, said: “Investors paused for calm before the potential storm ahead this week, with consumer confidence, GDP, inflation, Nvidia and Jackson Hole all in focus.”
This has led to an uptick in mining stocks, with Glencore gaining 7.4 per cent in the last five days, trading at 592.9p per share.
Fresnillo has climbed ten per cent in the last week, while Rio Tinto increased 8.8 per cent.
Performances from other sectors detached from the AI boom have also lifted the index, including banks and pharmaceuticals.
Screech to a halt?
The subdued reaction in the oil markets to US threats against Iran could weigh on the index. Brent crude declined 2.3 per cent in early trading to $89.7 (£65.8).
Streeter said: “For investors it’s still highly unclear whether this stance will force the conflict towards a breakthrough or simply add another layer of uncertainty.”
The FTSE 100’s performance also hinges on the outcome of Nvidia’s results, as it will grant investors a snapshot into AI demand.
Russ Mould, investment director at AJ Bell, said results will “have the power to move markets up or down” as investors look to see if AI momentum is slowing.