London close: Stocks end up but software sector still under pressure

(Sharecast News) - London stocks ended higher on Friday as US markets recovered, although software names remained under pressure. The FTSE 100 closed up 0.6% at 10,369.75.

Kathleen Brooks, research director at XTB, said: "After Thursday's rout, another recovery is on the cards for markets today. We mentioned earlier that the mini recovery in Bitcoin was likely to boost overall sentiment, as the link between crypto and AI stocks and the tech sector remains strong. Bitcoin is now higher by $5000 on the day, although it remains below the $70,000 level, silver and gold are recovering, and the S&P 500 is higher by more than 1%, led by the tech sector.

"There are still pockets of weakness, Amazon is lower by 9% on the back of its earnings report on Thursday night, and its massive capex pledge. Also, if the repricing of crypto is the key support for AI-linked stocks, then the foundations of the recovery remain weak."

She said there are still reasons to be sceptical about AI. "Tech earnings are strong so far, out of the 35 technology companies listed on the S&P 500, they have reported sales growth of 16% on average, and earnings growth of 24%.

"These are stunning results, however, most of this growth is not down to AI investments. For example, Meta and Google are still generating the bulk of their profits from their advertising businesses rather than their AI units."

On home shores, data from Halifax showed house prices rebounded in January to a record high.

House prices rose 0.7% on the month following a 0.5% decline in December. On the year, prices were up 1% in January following a 0.4% increase the month before.

The average price of a home stood at £300,077, up from £297,938 in December and above £300,000 for the first time.

Amanda Bryden, head of mortgages at Halifax, said: "While that's undoubtedly a milestone figure, and activity levels show a resilient market, affordability remains a challenge for many would-be buyers.

"Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability. That's a positive trend for buyers, and the long-term health of the market.

"And we're now seeing more mortgage deals below 4%. If inflation continues to ease, there should be further gradual reductions as the year goes on. "All in all, we still think house prices are likely to edge up between 1% and 3% this year."

In equity markets, luxury fashion brand Burberry was the standout gainer, with BA and Iberia owner IAG following close behind.

Banks Barclays and HSBC also rose, while gold miners shone as the price of the yellow metal recovered, with Fresnillo, Hochschild and Endeavour all up.

HgCapital advanced as it reported a rise in its full-year net asset value despite a "challenging" market environment, although the share price has taken a hit amid recent volatility in the software sector.

On the downside, software stocks were still in the red, with Experian, Relx and Sage Group all weaker as Amazon's AI spending plans exacerbated worries about the sector. Bytes Technology and Softcat also slumped, but LSEG ended well off lows, down just 0.5%.

High-performance polymers business Victrex retreated after saying its 2026 first-half performance was expected to be weaker than the same period a year earlier.

Metlen Energy & Metals tumbled after it warned earnings would significantly undershoot guidance.

Market Movers

FTSE 100 (UKX) 10,369.75 0.59% FTSE 250 (MCX) 23,103.35 0.00% techMARK (TASX) 5,921.92 -0.02%

FTSE 100 - Risers

Burberry Group (BRBY) 1,180.00p 5.17% International Consolidated Airlines Group SA (CDI) (IAG) 438.50p 4.33% Fresnillo (FRES) 3,694.00p 3.88% CRH (CDI) (CRH) 9,242.00p 3.26% Smurfit Westrock (DI) (SWR) 3,250.00p 2.85% Barclays (BARC) 479.10p 2.71% Airtel Africa (AAF) 327.60p 2.31% HSBC Holdings (HSBA) 1,305.80p 2.21% Kingfisher (KGF) 347.00p 2.09% BP (BP.) 478.05p 1.91%

FTSE 100 - Fallers

Metlen Energy & Metals (MTLN) 35.80p -20.27% Experian (EXPN) 2,499.00p -4.65% Relx plc (REL) 2,145.00p -4.62% The Sage Group (SGE) 846.80p -2.80% Compass Group (CPG) 2,125.00p -2.48% Smith & Nephew (SN.) 1,267.00p -2.05% British Land Company (BLND) 409.40p -1.96% Barratt Redrow (BTRW) 386.00p -1.56% Diageo (DGE) 1,760.00p -1.48% Mondi (MNDI) 888.40p -1.33%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 307.60p 8.16% HGCapital Trust (HGT) 427.50p 5.95% Diversified Energy Company (DI) (DEC) 975.00p 4.50% Playtech (PTEC) 298.50p 4.19% Carnival (CCL) 2,415.00p 3.74% Hochschild Mining (HOC) 659.50p 3.69% Marshalls (MSLH) 172.20p 3.36% Pan African Resources (PAF) 137.20p 3.31% Trainline (TRN) 206.20p 3.00% WPP (WPP) 267.80p 2.88%

FTSE 250 - Fallers

Pinewood Technologies Group (PINE) 442.50p -4.84% Victrex plc (VCT) 669.00p -3.88% Bytes Technology Group (BYIT) 296.40p -3.70% Softcat (SCT) 1,167.00p -3.63% Oxford Nanopore Technologies (ONT) 141.00p -3.56% Future (FUTR) 469.00p -3.02% Foresight Group Holdings Limited NPV (FSG) 405.50p -2.17% Workspace Group (WKP) 413.50p -2.13% Bellway (BWY) 2,588.00p -2.12% 4Imprint Group (FOUR) 3,890.00p -2.02%