London’s FTSE 100 climbed 0.5% on Thursday as gains among property and consumer stocks helped offset heavy losses in mining and technology-related shares, while stronger-than-expected UK economic growth reinforced expectations of further Bank of England interest rate increases.
The FTSE 100 advanced 54.99 points to 10,779.85 by midday, while the FTSE 250 declined 0.2% to 24,309.76 and the AIM All-Share slipped 0.4% to 764.87.
European markets were mixed, with France’s CAC 40 edging 0.1% higher while Germany’s DAX fell 0.5%, weighed down by renewed selling across the semiconductor and artificial intelligence sectors.
German chipmaker Infineon plunged 8%, while Siemens Energy dropped 5.7%, reflecting growing concerns about the scale of investment and borrowing required to support the global AI and data centre expansion.
AJ Bell analyst Dan Coatsworth said investors were becoming increasingly uncomfortable with debt-funded AI infrastructure spending, particularly as higher US inflation strengthened expectations of further Federal Reserve interest rate increases.
Reports suggesting slower-than-expected revenue growth at AI developer Anthropic added to concerns about whether the sector’s rapid expansion can sustain current valuations.
In London, Polar Capital Technology Trust fell 5.5% and Scottish Mortgage Investment Trust declined 3%, reflecting their exposure to major technology companies.
Mining stocks also suffered as investors reassessed demand for commodities used in data centre construction and other infrastructure projects.
Antofagasta slumped 7% after reporting third-quarter copper production of 151,900 tonnes, up 7% from the previous quarter but below analyst expectations of 155,000 tonnes.
Rio Tinto declined 4%, adding further pressure to the mining sector.
Meanwhile, official figures showed the UK economy expanded by 0.1% in August, beating forecasts of a 0.1% contraction.
Growth slowed from 0.4% in July, while June’s figure was revised higher to 0.4%, suggesting the economy remains more resilient than anticipated.
Lloyds analysts said stronger economic activity could reinforce expectations of another Bank of England interest rate increase, although inflation remains the primary consideration for policymakers.
The bank suggested third-quarter GDP growth could reach approximately 0.7%, potentially demonstrating that the economy is better positioned to absorb higher borrowing costs than previously expected.
US Treasury yields retreated sharply, with the benchmark 10-year yield falling to 5.09% from 5.26% on Wednesday as investors sought lower-risk assets following the technology sell-off.
The decline in bond yields supported gold, which increased to $4,153.23 an ounce, compared with $4,089.77 at Wednesday’s London close.
Sterling strengthened to $1.3255 against the dollar, while Brent crude eased to $104.35 a barrel.
Among individual UK stocks, THG surged 16% after upgrading its full-year adjusted EBITDA guidance to £103 million, ahead of market expectations.
The Myprotein owner reported third-quarter revenue of £408.8 million, up 0.9% year-on-year, and expects growth to accelerate during the important final quarter.
Chief Executive Matthew Moulding highlighted improving profitability and operational momentum, expressing confidence ahead of the group’s traditionally strongest trading period.
British Land gained 2.6% after reaffirming its earnings guidance, with the property company expecting first-half underlying profit to rise 7.1% to £166 million.
The group also maintained its full-year earnings per share forecast of at least 30.5p and medium-term growth expectations.
On AIM, Gana Media jumped 20% after reporting third-quarter gross gaming revenue of approximately $2 million, compared with $140,000 in the previous quarter.
The operator of Mexico’s Estadio Gana online betting platform also reported registrations rising to 87,523 from 21,296, supported by improvements in customer conversion and payment processing.
Meanwhile, Chancellor John Healey warned that the forthcoming UK Budget could involve difficult spending decisions, with government departments potentially required to absorb additional costs within existing allocations.
Investor attention now turns to US jobless claims figures, due later on Thursday, as markets assess the outlook for interest rates and economic growth.
Despite renewed volatility in technology stocks, the FTSE 100’s gains highlight selective investor demand for UK equities, with stronger corporate updates and defensive sectors providing support against wider global market uncertainty.
