London markets stood out among global peers as investors bet that the Bank of England was nearing the end of their rate hiking cycle.
The bluechip FTSE 100 index climbed 0.24 per cent to trade at 7,338.16 The midcap FTSE 250 index slipped 0.11 per cent to 18,206.37.
Indexes in Paris and Frankfurt fell, having recorded gains earlier in the day, falling by 0.4 per cent and 0.7 respectively. Markets in the US were also trading lower.
Counter-intuitively, investors in the UK were boosted by data out yesterday which showed that economic activity appears to be slowing.
PMI figures, which measure private sector activity, slipped into contraction in the UK and eurozone, suggesting a recession might be on the cards. In the US, meanwhile, the economy recorded only a slight expansion.
While gloomy, the figures indicate the interest rate hikes are starting to decisively slow economic activity. This means central banks will not have to tighten monetary policy much further than they already have.
“Bad news can be good news for many as markets have scaled back where they think Bank of England interest rates will peak,” Finalto’s Neil Wilson said.
Sentiment was also given a lift by Nvidia’s strong performance, which came in above already elevated expectations.
The tech firm’s strong earnings suggest that the AI rally, which has already fuelled strong returns in many markets around the world, has further to go.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown: “The artificial intelligence boom is continuing to catapult demand for the tech company’s complex chips into the stratosphere, with sales of $16bn expected in the three months to October.
“That is streets away from analyst expectations and reflects the seemingly insatiable appetite for Nvidia’s products, which are the leading option for creating AI tools like ChatGPT,” Lund-Yates continued.
On the FTSE 100, JD Sports rose to the top of the index, climbing 3.7 per cent. Ocado and Croda International also recorded gains, rising 2.9 per cent and 2.0 per cent respectively.
At the other end of the FTSE insurers Aviva and Legal & General fell 1.9 per cent as they were trading ex-dividend, a situation in which traders who buy their stocks now will not receive payments from their existing dividend programme.
On the FTSE 250, Harbour Energy dropped 3.6 per cent after it confirmed that it had swung to a loss due to the impact of the windfall tax.