The FTSE 100 reached a record high as investors moved money away from technology and semiconductor shares and towards banks, energy companies, miners and other established businesses.
London’s blue-chip index rose to 10,951 points on 29 July before closing 0.3% higher at 10,908. That left it just below its previous record closing level of 10,910, set in February.
The rise came during a sharp decline in AI-related shares across Asia and the United States. Concerns are growing over whether technology companies can maintain their current level of spending on artificial intelligence infrastructure.
South Korea’s Kospi index fell 6% after losing almost 11% during the previous session. Trading was halted for 20 minutes after the index dropped 8%, triggering a market-wide circuit breaker. Chipmaker SK Hynix reported record second-quarter profits, but the figures did not meet market expectations. Its shares fell by as much as 20% before recovering to close 10% lower. Samsung Electronics ended the session down 5%.
The two companies account for more than half of the Kospi’s market value, making the South Korean index particularly exposed to changes in demand for semiconductor shares. Japan’s Nikkei fell 1.5%, while shares in Taiwan Semiconductor Manufacturing Company dropped 3%.
The sell-off shows that strong profits alone may no longer support the high valuations attached to AI-related businesses. Markets are placing greater weight on future spending commitments, customer agreements and shareholder returns.
The FTSE 100 has limited exposure to this pressure. Technology companies represent only a small part of the index, while banks, oil producers, miners and consumer businesses carry much greater weight. This structure has reduced the effect of the global technology decline on the UK market.
Higher oil prices have also supported the index. BP and Shell together account for about a tenth of the FTSE 100, giving the market more direct exposure to rising energy prices than many overseas indices. Corporate results also added to the FTSE 100’s momentum. Standard Chartered and Rio Tinto increased shareholder payouts, while results from several large index members supported demand for UK shares.
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