The FTSE 100 climbed 0.5% on Tuesday morning while a global chip sell-off hammered Asian and continental European markets. Its lack of tech and chipmaker stocks shielded London, and the index now sits within reach of a record above 11,000.
London's blue-chip index turned its thinnest exposure to technology into an advantage on Tuesday, rising 0.5% as red screens spread across other markets. The absence of chipmakers from the FTSE 100 left it standing apart from the sell-off, and Investors' Chronicle noted the index could soon reach an all-time high and rise above 11,000 after four months of coiling.
Shell led the gainers, with shares up 2% after a trading update in which it raised integrated gas production guidance. Software names Relx, London Stock Exchange and Experian also rose, while miners led the decliners as precious metals tracked lower.
What spooked tech
The weakness came from tech. Samsung Electronics, the world's largest memory chipmaker, forecast a 19-fold rise in profits, yet its shares still tumbled 7% as worries over capital spending and demand muddied the picture. The concern is that AI infrastructure spend cannot keep driving memory prices higher forever. SK Hynix, the other big Korean chip name, fell 6% in sympathy but remains up 700% over the last 12 months.
The damage spread across Asia overnight. Korea's Kospi fell 5%, having been down more than 8% at one point, while the Nikkei slipped 2%. Europe held up better, with the Cac joining the FTSE in the green, but the Dax fell as European chipmakers dragged the Stoxx index lower.
Wall Street and the Fed in focus
The sell-off followed a broadly higher US session. On Monday the Dow Jones touched 53,000 for the first time before ending 0.3% higher, while the S&P 500 rose 0.7% on tech strength. Broadcom rose 3.7% after agreeing with Apple to expand their partnership on custom chips through to 2031, and US futures pointed lower on Tuesday morning.
Attention now turns to Wednesday's Federal Reserve minutes, the first under new chair Kevin Warsh. Warsh trimmed the previously wordy statement, dropped forward guidance and declined to contribute to the dot plot of rate guesses, which makes the minutes weigh more heavily than usual.
Source: Investors' Chronicle
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