The FTSE 100 index closed in negative territory on Tuesday, dragged down by significant declines in software, data analytics, and advertising companies amid renewed concerns over artificial intelligence disruption. This sell-off overshadowed a robust rally in mining stocks, leading to a mixed trading session in London.
Market Movements and Key Decliners
The FTSE 100 index closed down 26.97 points, or 0.3%, at 10,314.59. The FTSE 250 ended down 135.68 points, or 0.6%, at 23,290.37, while the AIM All-Share closed up 3.99 points, or 0.5%, at 818.33.
On the FTSE 100, several major data and information providers experienced steep losses. Relx slid 14%, London Stock Exchange Group tumbled 13%, Experian slumped 8.3%, Sage Group declined 6.5%, and Pearson fell 7.7%.
AI Catalyst Sparks Sector-Wide Anxiety
The sharp falls were primarily triggered by an announcement from US artificial intelligence firm Anthropic. The company released new 'agentic AI' tools designed for corporate legal teams, including a legal plug-in for its Claude generative AI chatbot.
Anthropic stated the tool can automate various legal tasks such as reviewing contracts, triaging non-disclosure agreements, composing briefings, and providing templated responses. This development renewed market fears that AI technology could threaten existing business models, potentially hitting future sales and growth for companies in related sectors.
Relx owns LexisNexis, a major provider of information and analytics to law firms, while London Stock Exchange Group is a significant financial data provider. Experian operates as a credit checker, Pearson provides educational content and assessments, and Sage sells accountancy software.
European and US Market Reactions
The anxiety spread across European markets. Dutch publisher Wolters Kluwer fell 13%, while losses extended to the advertising sector where WPP slumped 8.7%. In Paris, Publicis declined 8.9% despite reporting its fourth-quarter results.
In the United States, data provider Thomson Reuters slumped 16%, reflecting similar concerns. European equity indices showed modest declines, with the CAC 40 in Paris closing slightly lower and the DAX 40 in Frankfurt easing 0.1%.
Mining Stocks Provide Counterbalance
Offsetting these declines was a strong rally in mining stocks, which rebounded after recent falls. Precious and industrial metals saw notable gains:
- Gold was quoted higher at $4,971.16 per ounce, up from $4,696.11 on Monday.
- Silver rebounded 12%.
- Copper strengthened 4.5%.
The top five blue-chip risers on the FTSE 100 were all mining companies:
- Anglo American up 7.3%
- Fresnillo up 6.4%
- Antofagasta up 6.3%
- Endeavour Mining up 3.9%
- Glencore up 3.3%
"The sharp sell-off in gold over the past few days has encouraged investors to buy on the dip, scooping up the precious metal in their droves and making it sparkle again," said AJ Bell analyst Russ Mould.
Corporate Developments and Other Market Movers
Several significant corporate announcements influenced trading:
On the FTSE 250, Plus500 rose 7.0% after announcing the launch of a US prediction markets platform with a regulated business-to-consumer offering.
AG Barr jumped 5.7% as it reported annual trading in line with forecasts and announced acquisitions of the Fentimans and Frobishers Juices brands. The Irn-Bru owner delivered "modest growth" in the second half, with "good performances" from its Rubicon and Boost brands.
In the United States, stocks were generally lower. The Dow Jones Industrial Average was down 0.1%, the S&P 500 index declined 0.6%, and the Nasdaq Composite fell 1.3%.
PayPal sank 19% after naming a new chief executive as fourth-quarter results and guidance missed forecasts. The company appointed Enrique Lores as president and chief executive, effective March 1.
Disney announced chief executive officer Robert Iger will step down next month, with Disney Experiences chairman Josh D'Amaro promoted to the role. Disney shares were down 2.4%.
Currency, Commodities, and Other Notable Moves
In currency markets, the pound was quoted higher at $1.3695 at the London close, compared with $1.3651 on Monday. The euro stood at $1.1818, against $1.1804.
Brent oil was quoted at $67.15 per barrel at the London close, up from $66.03 late on Monday.
Elsewhere, CyanConnode soared 19% after announcing it had received a takeover approach from Dubai-based Esyasoft Holding, valuing the company at approximately £35 million.
Looking Ahead
Wednesday's global economic calendar features a slew of composite PMI readings, eurozone PPI figures, and ADP payroll data in the United States. The UK corporate calendar includes full-year results from pharmaceuticals firm GSK.
The market continues to navigate between technological disruption fears and commodity-driven rallies, creating a complex landscape for investors as AI developments reshape traditional business models.
