London’s blue-chip index ended the day higher as investors brushed aside renewed concerns about an AI-driven market bubble.
The FTSE 100 closed up 47 points at 9,703, a gain of 0.49% and its strongest finish in a week.
Metlen Energy (+5.3%), Ashtead Group (+4.7%) and JD Sports (+3.5%) were the standout performers, while Informa (-3.2%) and Smith & Nephew (-2.7%) posted the largest declines.
Dan Coatsworth, head of markets at AJ Bell, noted that US tech shares retreated after Oracle unsettled the market with results that fell short of expectations and a commitment to continue heavy AI-related spending. He pointed out that the weakness spread across the broader AI sector, with Arm Holdings, Broadcom, AMD and Nvidia all under pressure as investors questioned whether enthusiasm for the theme has gone too far.
He added that bubble worries have resurfaced just days before Christmas, highlighting uncertainty over when major AI investments will begin delivering meaningful financial returns.
Coatsworth also flagged that higher-than-expected US jobless claims arrived shortly after an interest rate cut, a combination the Federal Reserve will be monitoring closely for signs of a softening labour market—something that could strengthen the case for additional rate reductions.
Closer to home, the FTSE 100 saw a strong burst of buying in the afternoon, with materials, consumer cyclicals and healthcare stocks leading the advance.
