FTSE 100 outperforms as miners and oil majors lead gains

​​​FTSE 100 climbs on commodity strength

​The FTSE 100 advanced around 0.5% on Wednesday, outpacing broader European indices as commodity-linked stocks drove gains. The United Kingdom (UK) benchmark benefited from strength across miners, oil majors and banks, contrasting with weakness in technology shares that weighed on continental markets.

​Precious metal miners including Fresnillo led the advance as gold prices firmed on softer United States (US) economic data and expectations for Federal Reserve (Fed) rate cuts. The precious metal's resilience provided support for the sector, with investors seeking safe-haven assets amid ongoing macro uncertainty.

​Anglo American and Rio Tinto tracked higher base metal prices, adding further momentum to the mining sector. The strength in industrial metals reflects steady demand expectations despite broader economic headwinds, particularly from infrastructure spending in key markets.

​BP also contributed to index gains as crude oil prices firmed amid renewed tensions in the Middle East. The energy major's advance underscored the FTSE 100's defensive tilt, with the index's heavy weighting towards commodities and energy providing ballast against tech sector volatility.

​Sterling firms as gilt yields edge lower

​The British pound gained around 0.3% against the US dollar on Wednesday, approaching the $1.37 level as UK assets attracted modest flows. Sterling's advance came alongside a slight decline in gilt yields across the curve, suggesting some relief in UK government borrowing costs.

​The currency's strength reflected both dollar weakness following disappointing US retail sales data and relatively stable UK economic expectations. Forex markets have been closely watching the divergence between Bank of England (BoE) and Fed policy trajectories.

​UK gilt yields edged slightly lower across maturities, with the 10-year benchmark declining a few basis points. The move suggests investors remain comfortable holding UK government debt despite ongoing fiscal challenges and elevated public borrowing levels.

​LSEG surges on Elliott activist stake

London Stock Exchange Group (LSEG) jumped as much as 8.4% after reports emerged that activist investor Elliott has built a significant stake in the exchange operator. The move sent LSEG's share price to its highest level in several weeks, though the activist's specific intentions remain unclear.

​Elliott's involvement typically signals potential pressure for strategic changes, asset sales or operational improvements. However, questions remain over what specific plans the activist might pursue, particularly given LSEG's complex structure spanning exchanges, clearing and data services.

​AI disruption hits UK wealth managers

​UK-listed wealth management firms suffered sharp declines as investors reacted to the emergence of a new artificial intelligence (AI) tax tool that could disrupt traditional advisory services. St James's Place, AJ Bell, Rathbones and Quilter all fell significantly, echoing recent US selloffs in software and financial services.

​The AI tool threatens to automate tax planning and advisory services that have historically generated steady fees for wealth managers. The technology's potential to reduce costs and improve accessibility for clients poses a direct challenge to traditional business models.

​The selloff mirrors broader concerns about AI disruption across financial services, with technology increasingly capable of replicating complex advisory functions. Wealth managers face pressure to adapt their service offerings and fee structures to remain competitive.

​European tech sector under pressure

​The Stoxx 600 technology sector underperformed on Wednesday, with French software giant Dassault Systèmes suffering its steepest fall in decades following weak results and guidance. The sharp decline underscored mounting concerns about growth prospects and competitive pressures facing European tech firms.

​Dassault's warning on future performance spooked investors already nervous about AI competition and slowing enterprise spending. The company's struggles highlight broader challenges for established software providers as clients reassess technology investments and prioritise cost control.

​UK housing and travel updates

Barratt Redrow maintained full-year guidance after reporting solid first-half completions despite subdued market conditions. The housebuilder's steady performance suggests resilience in UK residential construction, though the spring selling season will prove crucial for full-year delivery targets.

​The macro focus now shifts to upcoming US jobs and inflation data, which could shape Fed policy expectations and influence global market sentiment. After weak US retail sales weighed on Wall Street, investors are watching for signs of economic resilience or further softening.