(Sharecast News) - London stocks edged higher in early trade on Thursday after better-than-expected UK GDP data, but gains were muted following another tech selloff in Asia and a hotter-than-expected US inflation reading.
At 0835 BST, the FTSE 100 was up 0.2% at 10,743.60. Given its limited exposure to the tech sector, the UK index was faring better than its European counterparts, with the benchmark Stoxx 600 index and Germany's DAX both down 0.4%.
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.
Chilen copper miner Antofagasta tumbled after a poorly received third-quarter production report and as copper prices fell.
Computacenter, Scottish Mortgage Investment Trust and Raspberri Pi also suffered heavy losses amid the tech selloff.
Workspace slid as it reported a dip in total portfolio occupancy in the second quarter and said customer activity was lower, while Mondi slumped as it said costs were higher than expected in the third quarter.
On the upside, defensives were in demand, with Imperial Brands, British American Tobacco and Haleon all higher.
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. In the 13 weeks to 26 September, sales rose 1.1% year-on-year to £433m, with stronger trading in the second half of the quarter, as the earlier part of the period was hit by hot weather.
Market Movers
FTSE 100 (UKX) 10,743.60 0.17%
FTSE 250 (MCX) 24,213.80 -0.60%
techMARK (TASX) 6,187.86 -0.22%
FTSE 100 - Risers
Imperial Brands (IMB) 2,866.00p 3.28%
Relx plc (REL) 2,848.00p 3.21%
Pearson (PSON) 1,340.00p 2.82%
British American Tobacco (BATS) 4,372.00p 2.79%
Haleon (HLN) 370.00p 2.65%
Admiral Group (ADM) 3,742.00p 2.63%
BT Group (BT.A) 203.30p 2.54%
Experian (EXPN) 2,754.00p 2.45%
The Sage Group (SGE) 1,097.00p 2.42%
British Land Company (BLND) 418.00p 2.26%
FTSE 100 - Fallers
Antofagasta (ANTO) 3,349.00p -5.82%
Halma (HLMA) 3,288.00p -4.64%
Anglo American (AAL) 3,895.00p -4.24%
Rio Tinto (RIO) 6,627.00p -4.06%
Computacenter (CCC) 5,280.00p -3.48%
Glencore (GLEN) 560.30p -3.00%
Spirax Group (SPX) 7,110.00p -2.53%
Smiths Group (SMIN) 2,647.00p -2.46%
Scottish Mortgage Inv Trust (SMT) 1,575.00p -2.36%
IMI (IMI) 2,912.00p -2.26%
FTSE 250 - Risers
THG (THG) 30.16p 10.39%
XPS Pensions Group (XPS) 324.50p 5.48%
Dunelm Group (DNLM) 845.50p 4.31%
4Imprint Group (FOUR) 4,482.00p 3.88%
Vistry Group (VTY) 230.80p 2.90%
Applied Nutrition (APN) 297.50p 2.67%
Sirius Real Estate Ltd. (SRE) 91.70p 2.28%
Rightmove (RMV) 516.20p 2.10%
Halfords Group (HFD) 267.50p 2.10%
Michael Page (PAGE) 198.80p 2.07%
FTSE 250 - Fallers
Workspace Group (WKP) 336.80p -9.01%
Mondi (MNDI) 752.20p -7.86%
Ceres Power Holdings (CWR) 340.00p -6.75%
Volex (VLX) 627.00p -6.38%
Pacific Horizon Inv Trust (PHI) 1,006.00p -6.19%
Renishaw (RSW) 5,255.00p -5.84%
Oxford Instruments (OXIG) 2,724.00p -5.49%
XP Power Ltd. (DI) (XPP) 1,900.00p -5.42%
Raspberry PI Holdings (RPI) 592.00p -5.19%
Polar Capital Technology Trust (PCT) 645.00p -4.87%
138.80 (1.29%)
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