London close: FTSE ends up as software stocks rally

(Sharecast News) - London stocks ended up on Monday, underpinned by strength in the software sector and benefitting from their low exposure to technology, as European peers were hit by an AI-related selloff in the tech sector.

The FTSE 100 closed up 0.4% at 10,697.57. The top-flight index outperformed its European peers, with the benchmark Stoxx 600 index ending down 0.5% as it has more exposure to technology names.

Meanwhile, oil prices gained after new strikes on Saudi Arabia, attacks on vessels near the Strait of Hormuz and the shutdown of Saudi Arabia's East-West pipeline. Brent crude and West Texas Intermediate were up 3.8% at $108.58 and $103.87 a barrel, respectively.

Richard Hunter, head of markets at Interactive Investor, said: "Two separate interviews on Saturday from the CEOs of rivals OpenAI and Anthropic threw some cold water on the current state of play. OpenAI revealed that it would not be proceeding with its IPO this year, on the basis that it would be 'ill-advised', and Anthropic advised that the pace of AI innovation needs to slow because of safety concerns. Of course, even if Anthropic and others in the US went down that route, the 'toughest dilemma' would then remain as to whether China and others would follow suit. It also brings into question whether the tsunami of investment may be starting to peak in that space.

"The weekend was also punctuated by a further 2% oil price spike overnight on Sunday to leave the price hovering around $107 per barrel. This followed reports that Saudi Arabia had temporarily closed a key pipeline which had been used to bypass the Strait of Hormuz following drone attacks launched from Iraq. This East-West pipeline, which links the Gulf to the Red Sea, had been moving several million barrels each day and inevitably causes additional supply constraints.

"The development also suggests that the conflict is as far away from resolution as ever, and the inflationary impacts of elevated oil (and derivative) products are starting to become keenly felt."

Looking ahead to the rest of the week, policy announcements from the Federal Reserve, the Bank of England and the Bank of Japan will be in focus.

Patrick Munnelly at Tickmill Group said: "The BoE is expected to hold rates this week, but investors are watching for another £50bn reduction in gilt holdings under quantitative tightening. With both the Fed and ECB tightening financial conditions, short sterling futures are fully pricing a 25 bps BoE hike by November.

"The BoJ, meanwhile, faces growing pressure to raise rates on Friday as policymakers attempt to lean against Yen weakness and energy-driven import inflation."

In equity markets, software stocks, seen as beneficiaries of a slowdown in AI, were among the top performers, with Sage Group, Relx, LSEG and Experian all up. Trustpilot and Playtech also advanced.

Chris Beauchamp, chief market analyst at IG, said: "These stocks were victims of the SAASpocalypse, on fears AI would wipe out their businesses.

"Those fears were overdone, but if the AI giants do put their foot on the break, then the outlook for revenues for Sage, Relx and their SAAS brethren globally becomes much brighter, even if it only delays a longer-term loss of business."

BP and Shell gushed higher in tandem with oil prices.

Drugmaker GSK gained as it hailed two major advances in its oncology pipeline, while AstraZeneca rallied despite saying that a breast cancer pill had failed to meet the primary endpoint in a phase 3 trial.

On the downside, miners Antofagasta and Anglo American lost ground as copper prices fell.

Shares in GlobalData plunged after the data and analytics group warned that full-year profits would fall short of market expectations as weaker-than-expected revenue growth and increased investment pressured margins.

Raspberry Pi - which makes high-performance, low-cost single-board computers (SBCs), microcontrollers, and computing accessories - was also under the cosh amid AI worries.

Market Movers

FTSE 100 (UKX) 10,697.57 0.44%

FTSE 250 (MCX) 23,834.48 -0.59%

techMARK (TASX) 6,004.29 1.21%

FTSE 100 - Risers

Relx plc (REL) 2,606.00p 5.29%

The Sage Group (SGE) 1,008.50p 5.27%

GSK (GSK) 1,854.50p 4.69%

Smith & Nephew (SN.) 1,048.50p 3.97%

AstraZeneca (AZN) 12,154.00p 3.81%

British American Tobacco (BATS) 4,250.00p 3.61%

Coca-Cola HBC AG (CDI) (CCH) 4,644.00p 3.34%

Tesco (TSCO) 480.90p 3.33%

Unilever (ULVR) 4,697.00p 3.20%

London Stock Exchange Group (LSEG) 8,474.00p 2.86%

FTSE 100 - Fallers

Halma (HLMA) 3,432.00p -5.56%

Antofagasta (ANTO) 3,586.00p -5.38%

Weir (WEIR) 2,600.00p -4.48%

Fresnillo (FRES) 2,912.00p -3.38%

Barratt Redrow (BTRW) 276.20p -3.26%

Barclays (BARC) 478.50p -3.09%

JD Sports Fashion (JD.) 76.56p -2.57%

Centrica (CNA) 147.20p -2.45%

International Consolidated Airlines Group SA (CDI) (IAG) 409.70p -2.38%

Glencore (GLEN) 591.00p -2.28%

FTSE 250 - Risers

WPP (WPP) 386.20p 5.20%

Trainline (TRN) 202.40p 4.65%

Trustpilot Group (TRST) 261.80p 4.14%

Playtech (PTEC) 415.80p 3.85%

NCC Group (NCC) 131.00p 3.31%

Rightmove (RMV) 493.60p 3.16%

B&M European Value Retail (BME) 231.00p 2.76%

Finsbury Growth & Income Trust (FGT) 798.00p 2.70%

Foresight Environmental Infrastructure Limited (FGEN) 87.50p 2.46%

Harbour Energy (HBR) 280.00p 2.41%

FTSE 250 - Fallers

Globaldata (DATA) 58.20p -18.72%

Ceres Power Holdings (CWR) 368.60p -9.92%

Oxford Instruments (OXIG) 2,610.00p -5.43%

Pan African Resources (PAF) 116.80p -5.35%

Raspberry PI Holdings (RPI) 524.00p -5.24%

Renishaw (RSW) 4,900.00p -4.67%

Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,440.00p -4.64%

Hochschild Mining (HOC) 587.00p -4.08%

Discoverie Group (DSCV) 758.00p -4.05%

XP Power Ltd. (DI) (XPP) 1,820.00p -4.01%