London’s blue chips have staved off major DeepSeek-related declines so far this week as a lack of exposure to the technology sector proves to have, for once, been beneficial.
As the Nasdaq tanked 3.1% and the S&P 500 shed 1.5% on Monday, the FTSE 100 managed to eke out a gain, albeit by just one point.
A further gain on Tuesday meant the FTSE 100 was up 0.6% for the week so far to outperform both tech-heavy US indices, European counterparts in Paris and Germany, alongside London’s mid-caps.
Technology stocks had been hammered globally following DeepSeek’s release of a supposedly cheaper and less data-hungry artificial intelligence bot last week.
Having called into question the relevance of so-far dominant names, the likes of Nvidia Corp (NASDAQ:NVDA, ETR:NVD) took a beating, shedding almost US$600 billion in value, before Tuesday appeared to bring a reprieve.
However, for the FTSE 100, exposure to the likes of oil, banking, pharmaceuticals and mining left it virtually untouched.
Indeed, it gave “no reaction to the market rout,” Swissquote Bank analyst Ipek Ozkardeskaya said, which had taken around US$1 trillion off European and US stocks on Monday.
Ozkardeskaya added “the very small exposure of the British big caps to technology”, though “disquieting”, could “be interesting in case of a deeper tech selloff”.
XTB analyst Kathleen Brooks added: “If US tech dominance is permanently impacted by DeepSeek, then it could give European stocks the chance to play catch up.”