London’s FTSE 100 climbed to a fresh record high on Wednesday, as investors rotated away from technology and semiconductor stocks amid a widening global sell-off.
The blue-chip index touched 10,951 points during morning trading, its strongest level since 27 February, the day before US and Israeli attacks on Iran triggered widespread market volatility.
The index closed up 0.3% at 10,908, just marginally below its record closing value of 10,910 set in February, defying the turbulence gripping other major global markets.
The FTSE 100’s heavy weighting towards finance and energy sectors has largely insulated it from the technology rout that has rattled markets across Asia and North America in recent sessions.
AJ Bell’s investment director, Russ Mould, said the index had been “helped by its lack of exposure to technology and AI stocks, and a slew of strong corporate results, with index heavyweights Standard Chartered, Reckitt Benckiser and Rio Tinto all delivering either better-than-expected profits, or bumper cash returns to shareholders, or both.”
Standard Chartered and Rio Tinto both announced rises in shareholder payouts on Wednesday, adding further momentum to London’s outperformance against its global peers.
The oil price continued to climb after the US military said it had knocked down an Iranian missile barrage and worked with Saudi Arabia’s forces to strike sites in Iraq that Tehran-backed militias had recently used to launch attacks.
Brent crude, the international benchmark, rose above $90 a barrel by late afternoon in London, a rise of more than 7%, providing an additional boost to energy-heavy London listings.
Seoul’s Kospi index, dominated by semiconductor manufacturers, bore the brunt of the sell-off, falling as much as 12.6% at one point before partially recovering to close down 6%.
Trading on the Kospi was halted for 20 minutes for the second consecutive session after an 8% plunge triggered a market-wide circuit breaker, underscoring the severity of investor anxiety.
Chipmaker SK Hynix, which produces chips essential to AI datacentre expansion, reported record profits for the second quarter but fell short of investor expectations, triggering a sharp sell-off.
SK Hynix shares fell as much as 20% before recovering to close around 10% lower, while fellow chipmaker Samsung Electronics closed 5% down on the day.
Gary Tan, a portfolio manager at Allspring Global Investments in Singapore, said “SK Hynix delivered strong results, but in today’s AI market strong is no longer enough.”
Tan added that “investors were looking for additional catalysts, particularly around long-term agreements and shareholder returns, to support a memory sector that has become the epicentre of the AI trade.”
The two South Korean chipmakers together account for more than half of the Kospi’s total market capitalisation, amplifying their influence over the broader index throughout this year’s volatile trading.
Japan’s Nikkei also closed 1.5% lower on Wednesday, reaching a two-month low as the regional technology sell-off spread beyond South Korea.
Shares in US chip companies including Intel, Advanced Micro Devices, Sandisk, Western Digital Corp, and Seagate Technology all fell on Wall Street on Tuesday.
Apple briefly rose above the $5tn valuation mark as investors sought safety in the stock, making it only the second company in history to reach that threshold.
South Korea’s finance minister, Koo Yun-cheol, told the national assembly the government was reviewing market stabilisation measures as losses deepened across the country’s equity markets.
Analysts noted that retail investors had led much of the buying in chipmakers using borrowed money, a dynamic that accelerated last month’s rally but has since sharply worsened the current downturn.