- FTSE 100 rises 118 points to 10,472
- LSEG boosted by report of activist stake
- St James's Place, AJ Bell and Quilter hit by AI worries
4.50pm: Record close
It was a strong day for commodity-related stocks in London, which saw the FTSE 100 finish up 118 points at a record high closing level of 10,472.
“Once more the FTSE 100 is the safe haven among stock markets, supported by rising commodity prices,” IG chief market analyst Chris Beauchamp said.
“Still, with overall US market breadth hitting a record high, the overall situation points towards further upside in the medium-term, even if the journey seems destined to be a bit more volatile.”
4.04pm: In the green
The London index is up over 120 points, another big day helped by gains for its sizeable group of miners and commodity-related stocks.
But there are gains across a number of sectors and there was also a counter-narrative of further losses for companies seen as being in danger of losing business to AI.
The leaderboard also included oil producers BP and Shell, housebuilder Persimmon, drugmaker AstraZeneca, grocer Tesco and utilities SSE, National Grid and BT.
Gilt yields falling to a three-week low have helped, with government borrowing costs easing as bond markets maybe see the threat to Keir Starmer dissipating.
Down among the Footsie's bigger fallers, St James's Place continues to wallow at the bottom, down almost 13% as it was seen as being in danger from new AI tools launched this week.
RELX, Sage Group and Experian, three companies that were at the pointy end of worries about AI last week, were among the fallers again.
3.37pm: Another AI threat
The AI debate has barely begun in insurance, reckons Barclays analyst Claudia Gaspari, with equity markets only just starting to treat motor insurers as potential structural losers.
Motor insurance represents roughly 35-40% of global property and casualty premiums. That makes it the single largest revenue pool in the sector.
Any long-term erosion driven by autonomous vehicles or AI-based insurance platforms would be seismic.
Barclays is not forecasting imminent earnings downgrades, but sees the threat as slower burn, with Aviva having "sizeable exposure" to personal motor with circa 23% of profits and limited short-term catalysts.
This is connected to the note cited earlier, where Barclays said the market was misreading the risk on London Stock Exchange Group’s exposure to artificial intelligence disruption.
1.40pm: US jobs report
US stock futures have picked up after the delayed January jobs report came in stronger than expected.
For January, there were 130k new jobs added, well ahead of the consensus forecast of 55k.
The US unemployment rate fell to 4.3%, from 4.4%, where it had been expected to stay.
Average hourly earnings were up 0.4% to $37.17. Over a year the rise was 3.71%.
New payrolls for 2025 the average monthly change was revised down to +15k from +49k.
Nasdaq futures are now up 0.5%, S&P 0.45% and Dow Jones almost 0.4%.
12.19pm: FTSE miners in charge, US futures in green
Miners are in the FTSE driving seat again, with Antofagasta, Endeavour and Fresnillo leading the gains, with Rio Tinto and Anglo not far behind.
The Footsie is now not far again from its record highs.
US futures are modestly positive, with the Dow Jones set to make further steps into its own record territory, with futures up 0.1%.
Nasdaq futures are marginally ahead, up 0.2%, with those for the S&P 500 in between.
11.40am: Treasury debate
After all the focus on the PM in the past week, theres's a new Westminster story that could be relevant for investors, if it gains traction: the Liberal Democrats have revived a long-debated idea, to reform HM Treasury.
Deputy leader Daisy Cooper made a speech this morning where she said most of Labour’s problems were due to "Treasury brain", and that that politics has been arguing over HMT power for decades.
As two examples, she points to the rises in employer NICs and rises in minimum wages were "a short-term Treasury tax grab with no regard for the crushing impact on jobs, on growth or investment", she says, while inheritance tax changes were "short-term Treasury tax grabs by the chancellor that could lead to some of the most resilient, long standing British businesses being broken up and sold off".
Westminster reporters are noting that Harold Wilson created the Department of Economic Affairs in the 1960s to deal with long-term economic planning, but it did not last.
CBI director general Tony Danker recently said: “No CEO would put the finance department in charge of sales.
"The Treasury has to be broken up, with long-term economic strategy the responsibility of a new ministry. That way it would be matched by an equal and opposite force with long-term vision and powers to direct the economy towards socially important goals."
The Guardian notes that "If a left-leaning coalition is in power after the next election, the Lib Dems could have considerable clout when this debate is being thrashed out again."
10.57am: AI sell-off highlights valuation misalignment
As trading today shows, investors are constantly trying to work out what the impact of AI productivity tools might be.
The debate over the risk of disruption "neglects a further important issue," says AJ Bell investment director Russ Mould, that of valuation.
Valuation metrics such as forward p/e ratios have flagged the "dangerous combination of lofty price tags and equally optimistic growth expectations at the top" and "could yet signal when excessive pessimism on both counts may mean there is a chance to reassess", he says.
Taking lessons from the grand masters of economics, namely JK Galbraith, Mould notes that his text, A Short History of Financial Euphoria, argued that "The least important questions are the ones most emphasise. What triggered the crash? This is not very important, for it is in the nature of a speculative boom that almost anything can destabilise it. Any serious shock to confidence can cause sales by those speculators who have always hoped to get out before the final collapse but only after all probable gains from rising markets have been reaped."
Interpreting this, Mould says it is not to suggest that high-quality stocks such as RELX, LSEG or Experian were in a ‘bubble,’ but using a one-year forward P/E ratios as a metric flags how expensive these stocks were.
"Investors had latched on to these names for, amongst other things, their proprietary data, sticky customers and pricing power."
Mould suggests investors "mistook solidity of a business model for safety, and rendered these stocks unsafe by paying multiples of earnings and cash flow which meant there was actually little margin of safety if anything ever went wrong".
He notes that many of the stocks affected by last week's bout of AI jitters "peaked some time ago", which suggests investors had "already begun to struggle to find reasons to pay higher valuations, even before the AI narrative".
Does that apply to AJ Bell being caught up in today's selling?
10.31am: Pound on the front foot
The pound is up 0.5% against the USD to 1.3709 this morning, and 0.25% versus the euro at 0.8697.
"Market jitters over the future of Prime Minister Keir Starmer have eased in the past couple of trading session after a raft of cabinet ministers issued coordinated statements publicly backing the under fire Labour leader," says market analyst Matthew Ryan at Ebury.
"The pound has found a bit of support off the back of the news, as market participants take the stance that it is better the devil you know than the devil you don’t.
"This is far from the end of the story, however, and we still think that it is a matter of when, rather than if, the PM will either stand down or be forced out of office."
On the Polymarket predictions market the betting suggests a 70% chance we'll have said goodbye to Starmer by year-end, with a 50/50 shot that he’ll be out in by the end of June.
"For now, at least, the staving off an immediate challenge to Starmer’s authority, and the threat of a possible move to the political left under a Rayner led government, could provide a modest boost to sterling."
Factors that could move the pound over the next 24 hours include the US jobs reporting this afternoon, and tomorrow's Q4 UK GDP figures, where economists expect growth of 0.2%.
10.05am: Financials falling
The biggest fallers on the FTSE 350 are all financial services names: St James's Place is down 11.25%, AJ Bell is down 5.85%, Quilter 5.3%, Rathbone's and IntegraFin 4%, while Aberdeen Group down 3.7%, Man Group PLC 2.8%, CMC Markets 2.7%, Schroders and Jupiter Fund Management.
"Fresh casualties from AI advances are falling on the investment landscape," says market analyst Susannah Streeter at Wealth Club.
"This time, wealth management companies have been caught in the crossfire as artificial intelligence services are unleashed."
She added: "The worry is that this is just the tip of the iceberg and fresh efficiencies will be unleashed by AI to disrupt the financial advice and investment industry and reduce the fees which can be charged.
"As the AI cards are shuffled, the pile of potential losers is mounting up, and speculation about which sector will be hit next is rife."
9.29am: FTSE making gains despite fallers
The FTSE 100 is moving back up again after losing momentum from its early surge.
BP is top of the risers, helped by positive commentary from City analysts.
Joshua Stone at UBS says BP’s decision to suspend share buybacks "was a wise one in our view, and a necessary step to help repair the balance sheet. This comes amongst what we see as the early stages of a rotation within the sector away from value towards growth."
Holding the index back are falls for Barratt Redrow and St James's Place.
SJP is down 10%, with falls for Quilter and AJ Bell, seemingly triggered by a sell-off of wealth managers stemming from AI fears.
A new tax planning tool from Altruist is reported to be the source of the fear, with the tool said to be able to "produce fully personalized tax strategies...in minutes".
US wealth managers such as LPL Financial, Charles Schwab and Raymond James sinking 7-8%
9am: Renishaw and other movers
Some more movers.
On the FTSE 250, Renishaw is up almost 4% after reporting constant currency sales growth accelerated to 20.5% in its second quarter, with commentary around orderbook implying strong intake.
Adjusted operating profit grew 11.4% to £57.5 million, broadly in line with the consensus forecast.
"We come away very encouraged," says analyst Bruno Gjani at UBS.
"Although H1'26 profit appears underwhelming, this was driven by FX effects," he adds, with currency swings causing a 360bps margin drag.
"Renishaw's guidance suggests a significant H2 driven adjusted operating profit upgrade (we estimate 4-14% at the mid-to-high end, driven by H2). We believe we are early into a re-acceleration cycle."
Elsewhere, Renalytix has dropped 25% after the company posted first-half revenues of $1.6 million and flagged slower-than-expected progress in rolling out its kidney disease diagnostic test.
IG Design surged almost 40% after the greetings cards and celebrations specialist said revenue, profit and cash will all come in ahead of expectations this year.
8.43am: Cussons builds up a lather
PZ Cussons shares are getting lathered up, rising over 9%, after the soap maker upgraded its full-year guidance after enjoying double-digit profit growth in the first half.
Revenue increased 8% to £269.3 million in the six months to 29 November, with like-for-like growth of 9.5% as sales improved across its four core markets.
Given the performance, the Africa-focused group now expects adjusted operating profit of £53-57 million for the 2026 financial year, up from November's guidance of £50-55 million.
8.24am: LSEG lifted as Elliott stake revealed
Actually, what's lifting LSEG more is news that activist investor Elliott Management has built a stake after a 20% share price drop last month and almost 40% over the past year.
The hedge fund led by Paul Singer has been "engaging" with the board to push "to help engineer an improvement in the group’s performance", according to a report from the FT.
Elliott has a "significant" stake, the report says.
8.15am: FTSE 100 opens higher, LSEG in lead
The FTSE 100 has shot higher in early trading, led by London Stock Exchange Group, and a group of banks and miners.
In initial trades, the index leapt over 50 points higher to 10,418, before dropping back a little to a gain of 33 points.
LSEG shares have gained almost 5%, possibly helped by a supportive note from analysts at Barclays Research who said the recent selling of some stocks on AI concerns is "overdone, in particular for LSEG".
Then comes Barclays PLC, Rio Tinto, Angto American and Fresnillo.
7.40am: Barratt Redrow backs guidance
Barratt Redrow has reported a steady first half, with performance broadly in line with its pre-Budget update to keep its full-year outlook unchanged.
Adjusted profit before tax fell 13.6% to £199.9 million. Net cash stood at £173.9 million.
For the full year, profits are expected to be within the current range of estimates of £558-617 million, with the full outturn dependent on sales activity through the spring selling season.
Based on the current forward sold position of 11,168 homes at a value of £3.4 billion, and solid reservation activity, completed sales of 17,200-17,800 are expected, in line with previous guidance.
7.23am: Card spending data
There's some UK macro data this morning, on consumer card spending, via Barclaycard, which has found that spending increased 0.8% in January – considerably less than the latest inflation rate, whcih stands north of 3%.
Essential spending fell for the sixth month, down 1.1%, while discretionary spending grew 1.6%, led by the strong performance of online retail over the January sales period, and a boost for both streaming and entertainment, driven by the cold and wet weather.
Online retail spend growth (excluding groceries) reached 5.7%, with its share of overall retail spending reaching its highest level since January 2022, at 59.2%.
Clothing spending rose 3.1%, health and beauty 8.0% and online marketplaces 4.8%. Entertainment was a standout, up 8.3%, while digital subscriptions jumped 9.3% as viewers tuned into shows such as Heated Rivalry and Stranger Things.
Jack Meaning, chief UK economist at Barclays said: “Improving consumer confidence is absolutely key to the UK’s economic outlook in 2026.
"With that in mind, the stabilisation in this month’s survey is an encouraging step in the right direction. With inflation set to fall quickly in the coming months, interest rates on course to ease and some early signs of resilience in wider activity, the scene is set for confidence to pick up, supporting growth in spending as the year goes on."
7.17am: FTSE 100 called higher, US jobs report in focus
The FTSE 100 has been called higher on Wednesday, as corporate results season continues in London but traders will focus more on economic data from across the Atlantic later.
London's blue-chip share index has been predicted to gain 21 points on the futures market, after closing 32 points worse off the day before at 10,353.84 at the close.
Over in the US overnight, the Dow Jones notched its third consecutive record close while other major indexes slipped.
The Dow added 0.1%, while the S&P 500 fell 0.3% and the Nasdaq dropped 0.6% after slower retail sales data added caution to an otherwise strong earnings season.
Today, traders are awaiting the delayed January non-farm payrolls report.
Asian markets are mostly in green this morning, led again by Japan's Nikkei, which has added 2.3% to reach another record high.