Despite growing concern over the trajectory of AI stocks, investors continue to have faith in London's benchmark index
The Ftse 100 skyrocketed to an all-time high when trading began this morning, before retreating slightly amid an artificial intelligence (AI) stock sell-off.
London's benchmark stock market index surged to an unprecedented 10,951 points, gaining as much as 0.7 per cent before retreating to trade flat later in the session.
The milestone surpassed the Footsie's prior record of 10,934, which was set at the end of February, marking a full recovery from the sharp downturn triggered by the Iran conflict, which sent global equities tumbling in early March.
Notably, the City of London's blue-chip index has gained nearly four per cent in July, while the S&P 500 has edged lower over the same period.
A savage rout in semiconductor shares has battered markets worldwide, with the Nasdaq 100 dipping briefly into correction territory on Tuesday as investors retreated from chip and memory manufacturers.
However, the Ftse 100's minimal direct exposure to the AI investment boom has shielded it from this turbulence.
With its portfolio dominated by financial institutions and energy giants rather than technology firms, the UK's flagship index has become an attractive refuge for investors seeking shelter from the tech-driven volatility.
Even with market turbulence across the pond and in Asia, iPhone manufacturer Apple became the second company to be valued at $5trillion (£3.7trillion).
The Nasdaq tech giant has so far benefited from investors running away from AI and semiconductor stocks this week.
Russ Mould, AJ's investment director, said: "The Ftse 100 is sneaking above the all-time closing high from February 28 in early trading on Wednesday, helped by its lack of exposure to technology and AI stocks, and a slew of strong corporate results.
"Index heavyweights Standard Chartered, Reckitt Benckiser and Rio Tinto all delivered either better-than-expected profits, or bumper cash returns to shareholders, or both.
"Analysts expect the Ftse 100’s members to pay out £88.8billion in dividends in 2026, while today’s announcements from Standard Chartered and Reckitt Benckiser take the total value of planned share buybacks by the index’s members to £40billion.
"Add in around £10billion in dividends and £7.9billion from buybacks from other members of the Ftse All-Share and AIM All-Share indices, and the £70billion in live or completed takeover deals, and investors with exposure to UK equities are poised to pocket £217 billion this year, if all goes to plan.
"All the same, investors in overseas stocks will note with a smile that Apple’s stock market capitalisation stands at $5 trillion for the first time.
"At a cross-rate of $1.33, that easily outstrips the London market’s total valuation, although both seem to be benefitting from their lack of exposure to the pell-mell spending on Artificial Intelligence large language models, data centres and memory chips, where doubts regarding the long-term returns on the huge expenditure and how the investments are to be funded continue to swirl.
"This all sets the stage for Wednesday night’s results from Microsoft and then the latest quarterly updates from Apple itself and Amazon after the US stock market closes on Thursday evening."
