(Sharecast News) - London stocks had extended gains by midday on Thursday, underpinned by better-than-expected UK GDP data and a strong showing from software-related names, shrugging off another tech selloff in Asia.
The FTSE 100 was up 0.5% at 10,779.05, avoiding a selloff thanks to its limited exposure to the tech sector.
Patrick Munelly at Tickmill Group said: "The Kospi plunged as much as 8%, triggering a temporary trading halt, while Samsung and SK Hynix fell more than 10%. The scale of the move reflects a broader reassessment of AI positioning. Investors are questioning whether the enormous capital being committed to AI infrastructure will generate sufficient returns, particularly with valuations elevated, supply-chain bottlenecks visible and competition intensifying.
"This is no longer just a semiconductor correction; it is a challenge to the market's dominant leadership theme. Since the AI trade has carried a large share of global equity performance, weakness in chips has a disproportionate index impact. Narrow breadth had already left markets vulnerable. Today's move shows what happens when the leadership cohort starts to wobble."
On home shores, figures released earlier by the Office for National Statistics showed the economy grew by more than expected in August.
Real gross domestic product ticked up 0.1% in August, a slowdown on July's 0.4% expansion, and by 0.7% over the three months. Consensus had been for the economy to shrink by 0.1% month-on-month, however, and to grow by a more modest 0.5% in the three months to August.
The biggest month-on-month growth was seen in production. The sector reported growth of 0.8%, in comparison to no growth in services and a 0.2% decline in construction.
However, the UK's dominant services sector drove the quarterly growth, despite the tepid August showing, after particularly strong performances in June and July. Overall, the services sector expanded by 0.9% in June to August, and helped offset a 0.2% softening in production and a 1.0% slide in construction.
The three-month print is regarded as a less volatile measure than the monthly data.
Liz McKeown, director of economic statistics at the ONS, said: "Upward revisions to already strong services growth in June and July helped drive robust growth across the three months, despite services showing no growth in August.
"Computer programming was once against the largest contributor to growth in the three months to August. Looking at the longer-term picture, compared with the same three-month period a year ago, the increased strength now seen in services is evident not just in computer programming but across a range of business-facing industries, including legal services, research and development, and advertising."
In equity markets, heavily-weighted mining stocks were the biggest drag, with Antofagasta, Rio Tinto, Anglo American and Glencore among the worst performers on the FTSE 100.
Dan Coatsworth, head of markets at AJ Bell, said: "Copper prices fell 1.6%, triggering a sell-off in base metal producers. Miners like Antofagasta and Anglo American were seen as prime beneficiaries of the AI boom as copper is a crucial raw material for the power build outs.
"Any idea of an AI bubble, and one that is primed to burst, could fuel fears that copper demand might not live up to lofty expectations. That could take some heat out of the market."
Chilean copper miner Antofagasta was also in focus after a third-quarter production update underwhelmed and as the blue chip raised its costs forecast.
Computacenter and Scottish Mortgage Investment Trust suffered heavy losses amid the tech selloff, while Mondi slumped as it said costs were higher than expected in the third quarter.
Workspace also fell as it reported a dip in total portfolio occupancy in the second quarter and said customer activity was lower.
On the upside, software-related stocks were on the rise, with Experian, LSEG, Autotrader and Relx among the top performers.
THG surged as it lifted its FY26 adjusted EBITDA expectations, while homeware retailer Dunelm gained as it reported a jump in first-quarter sales despite a soft market.
XPS Pensions shot up as it said full-year results were set to be slightly ahead of its expectations following strong revenue growth in the first half.
Market Movers
FTSE 100 (UKX) 10,779.05 0.51%
FTSE 250 (MCX) 24,329.04 -0.13%
techMARK (TASX) 6,173.93 -0.44%
FTSE 100 - Risers
Experian (EXPN) 2,793.00p 3.78%
Autotrader Group (AUTO) 529.20p 3.36%
London Stock Exchange Group (LSEG) 8,614.00p 3.16%
Compass Group 11 (CPG) 32.29p 3.03%
British American Tobacco (BATS) 4,390.00p 3.00%
Relx plc (REL) 2,850.00p 2.95%
IG Group Holdings (IGG) 981.50p 2.83%
Imperial Brands (IMB) 2,853.00p 2.70%
JD Sports Fashion (JD.) 90.70p 2.56%
British Land Company (BLND) 418.00p 2.45%
FTSE 100 - Fallers
Computacenter (CCC) 5,075.00p -6.77%
Antofagasta (ANTO) 3,332.00p -6.22%
Halma (HLMA) 3,324.00p -4.59%
Rio Tinto (RIO) 6,649.00p -3.93%
Anglo American (AAL) 3,942.00p -3.28%
Scottish Mortgage Inv Trust (SMT) 1,568.00p -2.82%
Weir (WEIR) 2,648.00p -2.72%
IMI (IMI) 2,926.00p -2.60%
Glencore (GLEN) 564.00p -2.48%
Spirax Group (SPX) 7,175.00p -1.98%
FTSE 250 - Risers
THG (THG) 32.20p 18.24%
Dunelm Group (DNLM) 863.00p 7.80%
XPS Pensions Group (XPS) 332.00p 7.10%
Baltic Classifieds Group (BCG) 2.41p 6.27%
Michael Page (PAGE) 203.40p 5.12%
Mony Group (MONY) 197.60p 4.22%
Bellway (BWY) 2,118.00p 3.62%
Rightmove (RMV) 518.40p 2.94%
Halfords Group (HFD) 269.50p 2.86%
Vistry Group (VTY) 232.40p 2.81%
FTSE 250 - Fallers
Ceres Power Holdings (CWR) 326.00p -11.12%
Mondi (MNDI) 736.20p -9.81%
Renishaw (RSW) 5,240.00p -7.16%
Oxford Instruments (OXIG) 2,710.00p -7.06%
Volex (VLX) 629.00p -6.82%
Workspace Group (WKP) 345.00p -5.73%
XP Power Ltd. (DI) (XPP) 1,906.00p -5.71%
Pacific Horizon Inv Trust (PHI) 1,010.00p -5.25%
Polar Capital Technology Trust (PCT) 643.00p -5.01%
Discoverie Group (DSCV) 829.00p -4.39%
142.29 (1.33%)
128.77
0.00