(Sharecast News) - London stocks had extended gains by midday on Monday, underpinned by strength in the software sector and benefiting from low exposure to technology, after a slump in AI-linked Asian stocks.
The FTSE 100 was up 0.8% at 10,734.18. The top-flight index was outperforming its European peers, with the benchmark Stoxx 600 index down 0.1%, Germany's DAX 0.4% lower and France's CAC 40 down 0.6%.
Stocks with AI links tumbled in Asia after the chief executives of Anthropic and OpenAI called over the weekend for the pace of development of AI models to slow down for safety reasons.
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 was up 2.6% at $107.28 a barrel and West Texas Intermediate was 2.3% higher at $102.35.
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 among the top performers on the FTSE 100.
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 ticked higher despite saying that a breast cancer pill had failed to meet the primary endpoint in a phase 3 trial.
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 was also in the red, hit by AI worries.
Market Movers
FTSE 100 (UKX) 10,734.18 0.79%
FTSE 250 (MCX) 23,903.67 -0.30%
techMARK (TASX) 5,997.77 1.10%
FTSE 100 - Risers
The Sage Group (SGE) 1,014.00p 5.95%
Relx plc (REL) 2,612.00p 5.62%
GSK (GSK) 1,852.50p 4.66%
London Stock Exchange Group (LSEG) 8,606.00p 4.44%
Smith & Nephew (SN.) 1,051.50p 4.41%
Experian (EXPN) 2,895.00p 4.10%
Diageo (DGE) 1,660.50p 3.84%
AstraZeneca (AZN) 12,092.00p 3.40%
Haleon (HLN) 344.70p 3.36%
British American Tobacco (BATS) 4,227.00p 3.05%
FTSE 100 - Fallers
Halma (HLMA) 3,452.00p -5.06%
Antofagasta (ANTO) 3,623.00p -4.38%
International Consolidated Airlines Group SA (CDI) (IAG) 406.90p -3.03%
Fresnillo (FRES) 2,932.00p -2.75%
Glencore (GLEN) 589.40p -2.55%
Weir (WEIR) 2,654.00p -2.50%
Rio Tinto (RIO) 7,193.00p -2.44%
Rolls-Royce Holdings (RR.) 1,420.60p -2.32%
Anglo American (AAL) 3,887.00p -2.26%
IMI (IMI) 2,970.00p -2.11%
FTSE 250 - Risers
Trainline (TRN) 204.20p 5.69%
WPP (WPP) 383.60p 4.52%
THG (THG) 27.10p 3.20%
Telecom Plus (TEP) 820.00p 3.02%
Michael Page (PAGE) 217.80p 2.93%
Hays (HAS) 68.70p 2.92%
Finsbury Growth & Income Trust (FGT) 798.00p 2.70%
Hilton Food Group (HFG) 683.50p 2.55%
Rightmove (RMV) 489.90p 2.42%
Diversified Energy Company (DI) (DEC) 1,108.00p 2.40%
FTSE 250 - Fallers
Globaldata (DATA) 56.85p -20.60%
Ceres Power Holdings (CWR) 371.00p -9.14%
Oxford Instruments (OXIG) 2,578.00p -6.59%
Raspberry PI Holdings (RPI) 520.00p -5.97%
Renishaw (RSW) 4,850.00p -5.64%
Wizz Air Holdings (WIZZ) 969.50p -4.58%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,442.00p -4.50%
Pacific Horizon Inv Trust (PHI) 1,074.00p -4.11%
Seraphim Space Investment Trust (SSIT) 177.20p -3.68%
Pan African Resources (PAF) 119.30p -3.57%
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