FTSE 100 Dips Amid AI Concerns as Bank of England Meeting Looms

The FTSE 100 dropped 0.26% from its record high due to declines in AI-related stocks, amid caution ahead of the Bank of England's upcoming policy meeting. Tech stocks suffered significantly, causing a ripple effect in the market. In contrast, precious-metals miners and copper saw gains.

On Tuesday, London's FTSE 100 retreated from its recent record peak as AI-linked stocks suffered setbacks, overshadowing gains made by mining companies. The blue-chip index closed 0.26% lower, having earlier reached an all-time high of 10,373.28 points during intra-day trading. Investors exhibited caution as they awaited developments from the Bank of England's policy meeting scheduled for later this week.

Technology stocks were among the hardest hit, with the sector experiencing an 11.8% decline following a widespread sell-off of European software and data-analytics firms. This investor uncertainty was fueled by updated artificial intelligence models, raising concerns about the defensive capabilities of established companies. Notably, RELX saw a 15% drop, while the London Stock Exchange Group fell by 12.7%, contributing to the broader AI-related downturn.

In contrast, the precious-metal miners index recorded a 5% rise, bucking a three-day losing trend, as gold staged its largest single-session rally since 2008. This comes on the heels of a commodity-linked stock selloff, influenced partly by geopolitical factors, including U.S. leadership changes. Meanwhile, heavyweight miners like Rio Tinto and Anglo American reported gains of 3.4% and 7.2%, respectively, driven by positive movements in copper due to supply and demand optimism.

(With inputs from agencies.)