A surge in artificial intelligence tools since late January has led to bouts of volatility in global markets as investors tried to weigh the impact of newer models on traditional businesses.In Britain, much of the decline was seen in the technology sector, life insurers and banks. The sectors are on track for weekly losses of more than 4% each.
However, on Friday, technology stocks rebounded with a 3.8% gain, with RELX gaining 5.4%, while other stocks that took a hit in the sell-off, such as credit analytics firm Experian, gained 4.3%.
Defense stocks also got a boost, up 2%, after investors assessed a report saying Prime Minister Keir Starmer plans to promote a multinational defense initiative at the Munich Security Conference this weekend.
On the FTSE 100, miners such as Rio Tinto and Antofagasta suffered, each losing more than 2% as they followed lower copper prices. On the earnings front, NatWest reported a 24% jump in annual profits and set more ambitious performance targets as it ramped up investment in Britain’s expensive but potentially lucrative wealth management market.
However, the British bank’s shares fell 3.3% as analysts said many of the upgraded targets were already priced in.
The week also brought data showing that the UK economy grew by just 0.1% in the fourth quarter, in line with the pace of the previous quarter and partly due to uncertainty ahead of Chancellor of the Exchequer Rachel Reeves’ November Budget.
Investors estimate a 63.4% chance that the Bank of England will cut borrowing costs by 25 basis points at its March meeting.
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