London's FTSE 100 closed higher on Friday, gaining 39.47 points (0.4%) to 10,902.56, even as US technology stocks extended their recent declines. The FTSE 250 slipped 111.43 points (0.5%) to 24,805.41, while the AIM all-share index rose 0.93 of a point (0.1%) to 757.19, up 0.4% for the week.
For the week, the FTSE 100 gained 2.2%, the FTSE 250 rose 1.2%, and the AIM all-share added 0.3%.
US Markets and Tech Falls
Across the Atlantic, equities were broadly lower. Around the London close, the Dow Jones Industrial Average was down 0.2%, the S&P 500 fell 0.8%, and the Nasdaq Composite declined 1.4%.
Microsoft recovered from early losses to trade 0.1% higher as it continued efforts to restore services after a global outage affecting Outlook and other Microsoft 365 applications. The Washington-based company said it was seeing “positive results” from its recovery efforts and ruled out malicious activity, attributing the disruption to elevated load on its infrastructure. The outage, which began late Thursday, left businesses, governments, and individuals worldwide unable to access crucial services for more than half a day.
Nvidia fell a further 3.4% as investors weighed the fallout from chief executive Jensen Huang's departure. Advanced Micro Devices gave back 10% of its recent gains, with CEO Lisa Su among those linked with the top job at rival Nvidia. Intel shed 5.0%, Broadcom was down 6.1%, and Micron Technology fell 4.6%.
AI Trade Concerns
In London, the declines weighed on technology investors Polar Capital Technology Trust, down 3.4%, and Scottish Mortgage Investment Trust, down 1.6%.
David Morrison, analyst at Trade Nation, noted that Nvidia is the “cornerstone” of the AI trade. “It designs the GPUs integral to the data centres currently in action, and those still to be built. It also helps to finance the data centre operators, neoclouds and frontier labs so dependent on its chips. The fact that Nvidia had lost more than a fifth of its value in four weeks even before the Huang scandal broke was a strong indication that investors have doubts over the likely returns on current, let alone future, AI investment. It may all work out fine. But there's a risk it doesn't, and that may not yet be priced in. All this comes ahead of the highly anticipated Anthropic IPO,” he noted.
Anthropic, an AI lab focused on building intelligent models for large organisations, is preparing for its initial public offering. Reports suggest final pricing could come next Wednesday, with trading starting a day later, though no date has been confirmed.
Anthropic IPO and Economic Data
In a filing earlier this week, Anthropic said it plans to sell 825 million shares at 70-78 US dollars. At the top of this range, the IPO would raise 64.4 billion dollars in gross proceeds. A separate 26 billion dollars non-voting placement with Alphabet's Google, Nvidia, Advanced Micro Devices, Broadcom, Micron, Microsoft, and TSMC brings the combined total to 90.4 billion dollars, or nearly 100 billion dollars if the over-allotment option is fully exercised.
Bloomberg has reported the IPO has been heavily oversubscribed, drawing about six times the orders for the shares available.
US producer prices increased less than expected in October, slowing sharply from September, although annual wholesale inflation accelerated to its highest level since November 2022, according to figures from the Bureau of Labor Statistics. The producer price index for final demand rose 0.3% month-on-month in October, slowing from a 1.4% increase in September and below the FXStreet-cited consensus forecast of 0.4%. On an annual basis, producer prices increased by 6.5%, accelerating from 6.3% in September but below expectations of 6.6%. Core producer prices, excluding food and energy, rose 0.3% month-on-month, matching expectations and slowing from a 0.8% increase in September.
Barclays analyst Pooja Sriram forecast October core PCE inflation at 0.3% on-month and 3.2% on-year. “The October PPI data carried clear imprints of firming pipeline price pressures for core goods, even as energy prices offered a respite to headline inflation,” she said. “On balance, we think the PPI report today points to continued consumer price pressures in the coming months, consistent with our baseline forecast path for CPI and PCE prices.”
Currency, Commodities, and Corporate Movers
The pound was quoted at 1.3219 dollars late Friday afternoon, down from 1.3233 on Thursday. Against the euro, sterling firmed to 1.1983 euros from 1.1968. The yield on the US 10-year Treasury was quoted at 5.13% late Friday, up from 5.08% on Thursday.
In Europe, the Cac 40 in Paris rose 0.1%, while the Dax 40 in Frankfurt fell 0.1%. Eurostat figures showed eurozone GDP increased 0.4% quarter-on-quarter in the three months to September, slowing from 0.6% growth in the second quarter.
In London, Aviva climbed 3.4% after reiterating confidence in meeting its three-year group targets. Wise jumped 7.8% after reporting higher half-year profit and revenue. Asos rose 2.9% after Peel Hunt upgraded the retailer to 'buy' from 'add', raising its price target to 560p from 475p. WH Smith fell 6.1%, while Dr Martens dropped a further 2.6%.
Gold was quoted at 3,878.82 dollars an ounce, higher than 3,865.83 on Thursday. Brent oil was trading at 96.59 dollars a barrel, up from 93.53 late Thursday.
The biggest risers on the FTSE 100 were Centrica, up 5.90p at 160.65p, Aviva, up 25.20p at 764.80p, Associated British Foods, up 47.00p at 2,053.00p, Autotrader Group, up 10.80p at 576.80p, and J Sainsbury, up 6.10p at 352.90p. The biggest fallers were Polar Capital Technology Trust, down 20.00p at 571.50p, 3i Group, down 65.00p at 2,645.00p, Antofagasta, down 72.00p at 3,140.00p, Computacenter, down 96.00p at 4,878.00p, and Weir, down 40.00p at 2,348.00p.
Monday's global economic calendar includes data from China on industrial production, retail sales, and fixed asset investment, along with Japan GDP and Canadian inflation figures. The local corporate calendar has half-year results from Big Yellow and a trading update from Legal & General.
