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(Sharecast News) - A late rally pushed the FTSE 100 into positive territory by the close on Thursday, with analysts pointing to the UK benchmark index's defensive qualities amid a tech sell-off in the US.
After spending most of the day in the red, the FTSE 100 finished the session with a 0.5% gain to 10,572.24, marking its highest closing price since 7 July.
Markets across Frankfurt, Paris and Milan finished with mild losses, while US markets opened lower, with the tech-heavy Nasdaq down 1.1% early on.
"Right now, not being so dependent on chip stocks is a good thing," said Chris Beauchamp, chief market analyst at IG.
"The rotation in markets has seen money desert chip and AI stocks, and flow to areas where these are either less prominent or non-existent. Once more the FTSE 100 finds itself in favour, its combination of dividend payers and names relatively unexposed to AI providing a haven."
London stocks got off to a weak start as investors digested the latest UK GDP data and a slew of corporate releases amid ongoing tensions in the Middle East.
Figures from the Office for National Statistics showed the UK economy grew by 0.1% in May, in line with expectations. The dominant services sector drove growth, rising 0.3% and helping to reverse April's 0.1% dip. It also offset weakness elsewhere in the economy, with production easing 0.5% and construction 0.8%.
Meanwhile, Sterling hit a two-month high versus the dollar and a 13-month high against the euro on the news, while gilt yields eased, on reports that Shabana Mahmood may become chancellor.
Kathleen Brooks, research director at XTB, said: "Politics play an integral part in UK asset prices, especially the pound and gilt yields, due to our rising debt burden, huge borrowing and unstainable welfare bill, this is why the market is experiencing a relief rally on the back of Mahmood's appointment.
Diploma gains; St James's Place tumbles
Diploma surged to the top of the FTSE 100 as it upgraded its full-year guidance following a "very strong" third-quarter performance. The company now expects FY26 organic revenue growth of 14%, up from 12% previously. It also expects operating profit growth of around 42%, representing a further 7% upgrade to consensus.
Weir, Spirax, IMI and Smiths all rallied as FTSE 250 engineer Rotork agreed to be bought by Swiss engineering company ABB in a £4.1bn deal. Rotork was up a whopping 67%. Under the terms of the acquisition, ABB will pay 506p per share in cash. This comprises 503p and a dividend of up to 3p. This represents a premium of 73% to the closing Rotork share price on Wednesday.
On the downside, St James's Place tumbled following a report that two more of its large appointed representatives have left the network. According to Bloomberg, Sheffield-based Prospera Wealth Management and Southeast-based Wellesley Investment Management are no longer in the network.
Miners Antofagasta, Anglo American, Fresnillo and Rio Tinto all lost ground.
On the FTSE 250, Ocado tumbled as the online grocery and warehouse tech group's full-year results failed to impress, while Trustpilot also fell sharply after a trading update.
Market Movers
FTSE 100 (UKX) 10,572.24 0.54%
FTSE 250 (MCX) 23,715.83 1.08%
techMARK (TASX) 5,924.86 0.61%
FTSE 100 - Risers
Diploma (DPLM) 7,195.00p 6.28%
Metlen Energy & Metals (MTLN) 43.66p 5.46%
Kingfisher (KGF) 297.10p 4.50%
Spirax Group (SPX) 6,930.00p 4.21%
Weir Group (WEIR) 2,504.00p 3.99%
Vodafone Group (VOD) 116.25p 3.61%
British American Tobacco (BATS) 4,535.00p 3.30%
Diageo (DGE) 1,580.00p 3.17%
Haleon (HLN) 370.10p 3.03%
Marks & Spencer Group (MKS) 383.20p 2.68%
FTSE 100 - Fallers
St James's Place (STJ) 1,110.00p -7.81%
Antofagasta (ANTO) 3,588.00p -4.12%
Flutter Entertainment (DI) (FLTR) 8,088.00p -3.94%
Fresnillo (FRES) 2,455.00p -2.39%
Centrica (CNA) 172.05p -2.36%
Anglo American (AAL) 3,485.00p -1.97%
Prudential (PRU) 1,053.00p -1.73%
SSE (SSE) 2,429.00p -1.70%
Rio Tinto (RIO) 6,741.00p -1.61%
National Grid (NG.) 1,216.50p -1.50%
FTSE 250 - Risers
Rotork (ROR) 485.00p 66.78%
Hays (HAS) 53.00p 10.42%
Pagegroup (PAGE) 160.30p 5.46%
Dunelm Group (DNLM) 860.50p 5.26%
4Imprint Group (FOUR) 3,944.00p 4.28%
THG (THG) 31.80p 3.99%
WPP (WPP) 288.80p 3.96%
AO World (AO.) 94.90p 3.94%
Baltic Classifieds Group (BCG) 186.70p 3.90%
Mondi (MNDI) 738.00p 3.83%
FTSE 250 - Fallers
Trustpilot Group (TRST) 259.80p -10.66%
Ocado Group (OCDO) 159.20p -10.41%
Ceres Power Holdings (CWR) 380.60p -10.36%
Seraphim Space Investment Trust (SSIT) 158.00p -9.30%
Playtech (PTEC) 374.40p -4.20%
Raspberry PI Holdings (RPI) 727.50p -3.83%
Herald Investment Trust (HRI) 2,945.00p -3.12%
Hochschild Mining (HOC) 438.20p -3.01%
Endeavour Mining (EDV) 3,422.00p -2.62%
Premier Foods (PFD) 193.70p -2.61%
